The Three-Pillar Principle Becomes Enshrined in the Federal Constitution

In 1972, voters had a choice between two models of pension provision: either the conversion of the AHV into a «people's pensions» or a moderate expansion of state old age provision as part of a three pillar model. The electorate opted for the latter proposal.

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On 3rd December 1972, voters were faced with a major decision regarding pension provision. In the context of this vote, 75 percent of the electorate was in favor of enshrining the three-pillar principle in the federal constitution and introducing mandatory affiliation to occupational old age provision. At the same time, voters rejected the Swiss Workers Party popular initiative ‘for a people's pension’. The Swiss Workers Party initiative intended to expand the old age and survivors’ insurance (AHV). The state public pension was to cover at least 60 percent of income and guarantee an annual pension of at least 6,000 francs. The minimum AHV pension for single persons amounted to 2,640 francs at that time, while the average wage was around 23,000 francs per year. This would have essentially entailed the end of public and private sector occupational pension plans. According to the initiative, these were to be ‘integrated’ into the new insurance system. On the other hand, a counterproposal – put forward not only by the bourgeois parties, economic associations and private insurers, but also supported by the Social Democratic Party (SP) and the trade unions – advocated a combination of a subsistence-level AHV (first pillar), compulsory occupational pensions (second pillar) and voluntary private provision (third pillar). In addition, this proposal was made palatable by the announcement of the eighth AHV revision set to immediately double existing old age pensions.

The voters therefore facilitated a breakthrough for a ‘Swiss solution’ to pension provision. This solution was based on minimal state pension provision and left plenty of room for private provision. While the number of people with occupational provision had risen steeply from 15 percent of workers in 1941 to 45 percent in 1966, the Federal Council first spoke of ‘three forms’ of old age provision in 1963, adopting a concept developed by life insurers. However, it was only in response to two popular initiatives demanding the expansion of the AHV, launched respectively by the Swiss Workers Party as well as by the Socialist Party (this particular initiative was withdrawn), that a majority favored a mandatory second pillar of old age provision.

Literatur / Bibliographie / Bibliografia / References: Leimgruber Matthieu (2008), Solidarity without the state? Business and the shaping of the Swiss welfare state, 1890–2000, Cambridge; Lengwiler Martin (2003), Das Drei-Säulen-Konzept und seine Grenzen: private und berufliche Altersvorsorge in der Schweiz im 20. Jahrhundert, Zeitschrift für Unternehmensgeschichte, 48, 29–47.