Switzerland Enforces Facial Covering Ban, Raises Pensions in New Year

Switzerland is implementing a series of significant changes starting January 1, 2025, which impact various sectors including legal, economic, and social frameworks. These include a ban on facial coverings, reforms to inheritance laws, increased pensions, and measures to strengthen bank solvency and liquidity. The changes reflect a growing alignment with European norms and a response to past financial crises. Here is a detailed overview of these changes.

Key Changes

1. Swiss Burqa Ban

• A ban on facial coverings in public places takes effect from January 1, 2025.
• The ban applies to burqas, niqabs, and other face coverings, with violations punishable by a fine of up to CHF 1,000 ($1,143).

Exceptions to the law include

• Face coverings for security, weather, or health reasons.
• Allowed in artistic performances, entertainment, and advertising.
• Switzerland joins France, Austria, and other European countries in implementing similar restrictions.

2. Inheritance Law Reforms

• Switzerland has revised its international inheritance law to better align with the European Succession Regulation.
• The reform aims to resolve frequent jurisdictional conflicts between Switzerland and EU/EFTA countries, particularly affecting the Swiss expatriates.

Benefits

• Legal certainty for Swiss nationals abroad and their relatives.
• Easier inheritance planning.
• The reforms are welcomed by the Organization of the Swiss Abroad (OSA), as around 61% of Swiss nationals abroad live in EU or EFTA member states.

3. Increase in State Pensions and Benefits

• Swiss state pensions will rise by 2.9% to keep pace with price increases and salary trends.

Adjustments Includes

• Minimum pension: CHF 1,225 to CHF 1,260 ($1,382 to $1,422).
• Maximum pension: CHF 2,450 to CHF 2,520 ($2,764 to $2,843).
• These changes also affect contributions, supplementary benefits, and occupational benefits.
• Pensions will be reviewed every two years based on cost-of-living changes.

4. Strengthening Bank Solvency and Liquidity

• Following the 2007-2009 financial crisis and the subsequent banking crises, Switzerland is implementing measures to improve bank solvency and liquidity.

Key Measures

• Banks must build capital reserves during stable economic periods, which can be accessed during financial stress.
• This is the final stage of reforms introduced after the collapses of UBS (2018) and Credit Suisse (2023).
• The measures aim to prevent taxpayer bailouts and ensure the stability of Swiss banks during crises.