AVS 2030: the Swiss pension reform (cross-border guide)

Context

In brief

• AHV 2030 reforms Swiss social security
• Estimated extra revenue of 600 million annually
• Minimum age increases from 58 to 63 years
• Right and left divided on measures

Key facts

• What: Reform of the first pillar AHV 2030-2040
• When: Bill presented on May 20, 2024
• Where: Bern
• Who: Federal Council and Elisabeth Baume-Schneider
• Amount: 600 million Swiss francs per year until 2040

While the government aims for new revenues and a gradual increase in the minimum retirement age, social partners remain dissatisfied with the proposed measures. Although everyone agrees on the need to reform the AHV, the recipes for doing so differ sharply. In Lugano as in Mendrisio, cross-border workers and residents look at these changes with apprehension, fearing repercussions on their purchasing power. While the left welcomes the project, the right and Ticino economic associations complain about the absence of structural reforms, such as an increase in the retirement age, currently set at 65 for everyone.

At the time of the bill presentation on May 20, Federal Councillor Elisabeth Baume-Schneider justified the reform with the need for the first pillar to best prepare for the retirement of the so-called baby boomers, born between 1946 and 1964. In short, the AHV must be revised to adapt it to Switzerland's demographic evolution for the 2030-2040 period. The project is expected to generate additional revenues of about 600 million Swiss francs per year until 2040. For this reason, the executive refrains from increasing, for now, the general reference age.

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Operational details

The reactions of the political and economic world to the AHV 2030 reform highlight a deep split between the factions, with financial allocations that directly affect the approximately 80,000 cross-border workers active in Ticino. Unsurprisingly, the Socialist Party and the Greens welcome the Federal Council's decision not to raise the retirement age to 67, a parameter that would have penalized the workforce active in the industrial hubs of Mendrisio and Lugano. The Socialist Party supports measures aimed at closing contribution gaps, including the obligation to pay contributions on daily sickness and accident allowances, thus protecting those working in the tertiary and healthcare sectors. There is also consensus on the income-related reduction percentages in the event of early retirement, allowing low-income workers to retire earlier with smaller losses. Furthermore, the Socialist Party and the Greens demand better recognition of educational and care work, requesting that credits in the first pillar be significantly increased and also applied in occupational pension provision, given that it is primarily women who perform this work, suffering lower pensions.

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Key points

To get your bearings on the changes envisaged by the AVS reform and to understand the effects on your social security and contribution position, it is necessary to follow the evolution of the institutional debate in Bern. New arrangements for contribution rates, such as adjustment for the self-employed and examination of dividends, require attention from those managing complex incomes. A border worker domiciled in Lugano who receives 90,000francs per year will see an increase in tax levies estimated at 0.3% from 1 January 2026, directly affecting the monthly net.

Monitoring legislative deadlines allows you to anticipate the impacts on your pension plan and accurately assess retirement planning in Switzerland. Those who work in Chiasso or Mendrisio must consider the progressive alignment of the retirement age of women to 65 by 2028, introduced by the federal law of 17 December 2021.

To better manage the transition, it is advisable to follow an operational checklist: check the AVS account statement at the Compensation Fund of the Canton of Ticino in Bellinzona, analyse the payments of the second pillar (LPP) and possibly plan voluntary redemptions before the end of the fiscal year. To explore the contribution aspects and calculate the impact on your income, you can use the calcolatore fiscale available online.

Source: tio.ch