Insurance & Pensions

Pensions in Switzerland

The Swiss pension system is based on three pillars.

 

The aim of the three-pillar principle is to maintain the accustomed standard of living for insured persons or their surviving dependants during retirement or in the event of disability or death.

 

First pillar

The first pillar of the Swiss pension system comprises Federal Old Age and Survivors’ Insurance (AHV) and Federal Disability Insurance (IV), as well as any supplementary benefits (EL). The first pillar is mandatory for everyone and secures the basic standard of living in retirement, or in the event of disability or death.

Second pillar

The second pillar is primarily governed by the Federal Act on Occupational Retirement, Survivors’, and Disability Pension Plans (BVG), the Federal Act on Vesting in Pension Plans (Vested Benefits Act, FZG), and the Accident Insurance Act (UVG). Altogether, the first two pillars should cover at least 60% of the insured person’s final salary, thereby enabling them to maintain their accustomed standard of living. The second pillar is compul- sory for employees whose income is subject to AHV contributions and who meet the requirement of earning a certain amount per year.

Third pillar

The third pillar comprises privately financed personal provision and is voluntary. Unlike ordinary savings, it brings certain tax advantages. The third pillar makes it possible to close specific pension gaps. If you are self-employed, you can compensate for the missing employee benefits insurance.