Life expectancy in Switzerland: challenges and opportunities for the pension system

Life expectancy in Switzerland: challenges and opportunities for the pension system

According to a report from www.nzz.ch,

Life expectancy in Switzerland has more than doubled in the last 150 years and is expected to continue to rise. This is a positive development, but it does lead to a need for adjustments in the pension systems. The consequences of this increase could be significant for the financial industry and the market. The normal retirement age does not increase in line with increased life expectancy, which could lead to financial bottlenecks in old-age and survivors' insurance (AHV).

Data from federal statisticians show that life expectancy at retirement age has increased significantly and women and men aged 65 can live an average of 23 years longer. This represents an increase of almost 70 percent since the introduction of the AHV in 1948. This poses major challenges for pension systems, particularly in terms of financing and the redistribution of resources from younger to older people.

International research suggests that there is a “natural” maximum human lifespan, which is 120 to 150 years. This could have a financial impact on pension systems as people age.

Furthermore, further advances in medicine are to be expected, particularly in the diagnosis and treatment of cancer and in the prevention of cardiovascular diseases. These developments could lead to people living even longer on average, thereby further increasing the financial burden on pension systems.

Although opposing influencing factors such as increasing health risks from pandemics and climate change are also being discussed, many observers still expect a further increase in life expectancy. This could lead to a further expansion of pension spending if no corresponding adjustments are made to pension systems.

Overall, it is expected that people in Switzerland will continue to age, which could have a significant impact on the financial industry and the market. Adjustments to pension systems and forward-looking financial planning are therefore essential to ensure financial stability.