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In our blog series on AHV21, we explain the changes and associated employer obligations in detail. The reform to stabilize the old-age and survivor’s insurance (OASI) was approved by voters on 25 September 2022 and came into force on 1 January 2024, but the associated gradual increase in the reference age for women will not begin until 2025.
The most important part of the reform will begin on January 1, 2025 - the increase in the reference age for women. In the years 2025 to 2028, the reference age for women will be increased in stages of three months per year. In addition to the change to the tax-free amount already explained in the last blog and the greater flexibility when drawing a pension (partial withdrawal, early withdrawal or deferral), there will also be a pension supplement for women of the so-called transition generation. There will also be lower pension benefit reduction rates in case of early withdrawal.
Raising the reference age for women
The reference age for women born in 1961 will be increased by three months for the first time from January 1, 2025, meaning that they will have to work longer if they are employed. For example, if Ms. Müller reaches the previous reference age of 64 on June 14, 2024, the official retirement time will be October 1, 2024 instead of July 1, 2024.
Thereafter, the increase to the reference age is made by a further three months per year:
- 2026: the reference age for women born in 1962 is 64 years and 6 months
- 2027: the reference age for women born in 1963 is 64 years and 9 months
- 2028: the reference age for both men and women born in 1964 is 65
This also applies analogously to the occupational pension plan (Pillar II). However, the pension fund regulations may also stipulate a lower retirement age, although this may still not be lower than the statutory minimum retirement age of 58. These changes should also be reflected in your systems, internal regulations, manuals and directives linked to the retirement of your employees.
The first increase in the reference age for women by three months has an impact on your HR and payroll processes and must be considered accordingly.
Changes to pensions for women
If women in the transition years do not draw their pensions in advance, they benefit from a pension supplement. This is a fixed amount that is paid out monthly in addition to the pension. It is fixed once and not adjusted thereafter for the entire retirement period. The amount of this supplement is determined by the year of birth, the contribution period and the average annual income up to the reference age. This supplement is not capped for married women and is not considered for the calculation of supplementary benefits.
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Stephen Turley
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