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Switzerland Considering Increased Employment Contributions or VAT to Fund Additional Pension Payment

The Swiss Federal Council is considering additional funding for a new “13th month” pension payment under the old-age and survivors’ insurance program (AHV), which will start in 2026. Two options are being considered: increasing employee contributions by 0.8 percentage points or increasing employee contributions by 0.5 percentage points and VAT by 0.4 percentage points. The Federal Council also plans to reduce the federal share of AHV costs from 1 January 2026 until a new AHV reform comes into force. To finance the reduction, two options are being considered: withdrawing the shortfall from the AHV fund or increasing employee contributions by 0.2 percentage points, or a combined increase in employee contributions by 0.1 percentage points and VAT by 0.2 percentage points to generate additional revenue.

Source Orbitax

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