Switzerland’s Social Insurance And Retirement System

Categories: InsuranceRetirement

The current retirement system offers a pension plan that consists of three pillars, which are a state pension, an occupational pension, and a private pension (“How much will my pension be when I retire?” n.d.). The state pension, also known as the “Old Age and Survivor’s Insurance” (OASI) aims to provide for the most basic living costs for retirees, widows and widowers, and those with disabilities (“Understanding your Swiss pension as a foreigner,” 2017). In order to receive this pension, people must have made uninterrupted payments from the time they were twenty years old until the time of their retirement, and the pension they receive is then calculated based on their contributions and their average incomes (“How much will…” n.

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d.). The second pillar, the occupational pension, is made up of contributions from both employees and employers (Muggler, 2017). People who make less than the threshold of 21,150 Swiss francs do not have to contribute to this pillar (“How much will…” n.d.). Additionally, employees may voluntarily make additional contributions to help those who do not meet the threshold, or to add additional funds for their own retirement funds (Muggler, 2017; “Understanding your Swiss…” 2017). The third and final pillar is the private pension, which is an optional pillar that is split into restricted and unrestricted plans (Muggler, 2017). The restricted plan is generally for self-employed individuals, who do not pay into the occupational pension, and is tax-deductible but follows certain guidelines (Muggler, 2017). On the other hand, the unrestricted plan is for anybody, and is flexible in how money can be saved and withdrawn (Muggler, 2017).

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Overall, this is the general pension structure of Switzerland.

The life expectancy for the Swiss is about 85 for women, and 81 for men (“Switzerland,” 2018). This high number may come from the high-quality healthcare system, a good sense of balance and wellbeing, or even the diet of healthy fats from Swiss cheese (Galloway, 2017; Raloff, 2014). Interestingly, Swiss men shared the title for longest male life expectancy with Iceland in 2016, but fell into second place in 2017 (“Life expectancy - Switzerland's men drop from first place, 2017). Some of the reasons for this change could be due to Swiss men smoking and drinking more, as well as breathing less clean air than Icelandic men (“Life expectancy…” 2017). On another note, education could affect the life expectancy of the Swiss, regardless of gender. One study found a significant correlation between education level and life expectancy, with those in higher educational brackets having longer life expectancies (Spoerri et al., 2006). Granted, this study focused on the German-speaking citizens of the country, so it may not necessarily apply to non-German-speaking Swiss citizens. Another study suggests that there is a strong correlation between income distribution and average life expectancy for the Swiss (Wilkinson, 1992). However, the correlation does not necessarily signify a causal relationship between income and life expectancy, and many other factors that relate to income could affect the life expectancy (Wilkinson, 1992). Ultimately, the elderly Swiss population is able to enjoy relatively long lifespans, though there may be variation due to such factors as education and income.

Switzerland’s social insurance system follows a Bismarck healthcare model (“Health Care Systems – Four Basic Models,” 2010). Switzerland, which consists of private insurance companies, achieved universal coverage by making coverage mandatory (“Five Capitalist Democracies & How They Do It, 2008). For those who cannot afford insurance, the government helps to subsidize the costs (“Five Capitalist Democracies…” 2008). Insurance companies must offer the most basic plan at a not-for-profit cost, but can profit on supplemental plans (Schwartz, 2009). Additionally, all citizens must pay the same for premiums, regardless of class or income (Schwartz, 2009). On the flip side, insurance companies are not able to refuse insurance to any customers, regardless of potential predispositions (“Five Capitalist Democracies…” 2008). In terms of healthcare costs, the government regulates the fees for drugs, lab tests, and medical devices, while insurance companies and physicians must negotiate on prices for healthcare services (Schwartz, 2009; “Five Capitalist Democracies…” 2008).

Some health behaviors and needs that relate to the physical and mental aspects of the older adults of Switzerland relate to physical activity. According to WHO’s “World Report on Aging and Health,” physical activity can be beneficial for muscle and bone strength, as well as mental health related to depression, anxiety, and dementia (2015). Also according to the “Report on Ageing and Health,” nearly 10% of adults sixty and older in Switzerland are physically inactive (2015). One study, which suggests the percentage is even higher for people in the 65-69 age range and nearly 40% for people above eighty, analyzed patterns of physical activity among older adults in Switzerland, and found that people with more education and income tended to engage in more moderate or sport-related physical activity such as swimming, aerobics, or strength training, while those with less education and income tended to engage in more habitual activities like walking and bicycling (Meyer et al., 2005). This study also found data that suggested older adults in rural areas were more likely to be physically inactive, while those in urban and suburban did not have any differentiation for activity or inactivity (Meyer et al., 2005). The study concluded that older adults across the various demographics were more likely to comply with habitual physical activity as they aged, and suggests that physical activity can be improved in Switzerland with more research and changes in environment and behavior (Meyer et al., 2005).

Older adults in Switzerland generally receive care through institutionalized settings or the family. One study explores a potential relationship between the demands on familial caregivers and the eventual admission of older adults to nursing homes. Since caregiving is stressful, the study aimed to found which factors among the caregivers or the older adults would lead to institutionalization (Kesselring et al., 2001). Some of the factors that affected institutionalization include the patient being male, the caregiver being sick, the patient being more physically disabled and needing help—especially in the middle of the night—and a weak relationship between the patient and the caregiver (Kesselring et al., 2001). Furthermore, a study regarding long-term care for older adults with intellectual disabilities suggested that familial long-term care usually depended on whether there were enough family members available for adequate support, there was enough physical space, the family members did not have their own health conditions, and there was enough financial resources for care (Jecker-Parvex and Breitenbach, 2012). These findings suggest that long-term family care largely depends on whether the family is fincancially, physically, and mentally able to. In terms of community support, one city in Switzerland has come up with a potential policy for informal care outside of the family. In St. Gallen, there is an elderly care “bank” in which caregiving volunteers can assist in care for older adults for a certain number of hours, and receive that number of hours of care when they need it in the future (Thoele, 2012). This informal care program could potentially be useful if family dynamics change or there is an absence in strong family ties.

Updated: Feb 28, 2024
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Switzerland’s Social Insurance And Retirement System. (2024, Feb 28). Retrieved from https://studymoose.com/switzerland-s-social-insurance-and-retirement-system-essay

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