The Swiss pension system is based on a 3 pillar principle:
- 1st pillar: Old-age pension and insurance for surviving dependents (OASI) and disability insurance (DI). These types of insurance are mandatory for everyone who lives or works in Switzerland.
- 2nd pillar: Occupational benefit plan (OBP).
It supplements the OASI and DI and aims to maintain the accustomed standard of living in old age. All employees, who are insured by OASI and earn a certain minimum amount, must contribute.
- 3rd pillar: Individual benefit plan.
This additional individual benefit plan is voluntary and supplements the above. Certain tax advantages can be attained by saving with the 3rd pillar
The Swiss social security system also includes :
- Health insurance
- Family allowances
These are payments aimed to partially compensate the cost of bringing up children. Family allowance contributions are settled by the employer.
- Accident insurance (accidents at work and outside the workplace)
All employees who work in Switzerland must be insured against accidents at work by their employers. If they work for more than 8 hours per week for the same employer they are also insured for accidents outside the workplace. Premiums for the latter can be deducted from the salary. Persons who are not employed, e.g. housepersons, students or pensioners are not covered.
- Unemployment insurance
All employees who pay contributions to the OASI must also pay unemployment contributions. Unemployment insurance insures loss of wages in case of redundancy.
Employer and employee share social insurance contributions on a 50-50 basis. The following are deducted from the employee's gross salary:
- Old age pension and insurance for surviving dependents (OASI), disability insurance (DI) and EO (replacement of wages) : 5.05%
- Unemployment insurance (UI) : 1% for gross salaries up to CHF 106,800
- Occupational benefit plan (OBP): approximately 7.5% (depending on age group)
- Accident insurance (AI): approximately 0.8%
You will find all important information in a brochure issued by the Swiss Federal Office for Social Security : “ Swiss social insurance system: Sojourn in Switzerland and departure. Information for foreign nationals.”
