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Pillar 1 – state pension
Pillar 1 is part of the largely state-regulated Swiss pension system, which also includes pillar 2 and pillar 3:
- Pillar 1: the state pension (OASI – AHV/ARS)
- Pillar 2: the occupational pension (pension schemes subject to the Federal Act on Occupational Old Age, Survivors' and Disability Pension Provision (BVG/LPP)
- Pillar 3: the private pension, comprising pillar 3a and pillar 3b
The three-pillar system is designed to financially support your subsistence needs in old age, protect you in the event of disability and provide surviving dependants with the subsistence minimum in the event of your death.
The first pillar is compulsory for anyone in Switzerland earning an income subject to OASI.
Overview
- Old age and survivors’ insurance (OASI – AHV/AVS)
- Disability insurance (DI – IV/AI)
- Supplementary benefits (EL/PC)
- Unemployment insurance (ALV/AC)
- Maternity insurance (MUV/AMat)
- Income replacement during military service (EO/APG)
Pillar 1 is financed on a pay-as-you-go basis. Accordingly, the contributions of currently active employees finance the retirement of those now drawing an OASI pension. Employees are required to start making contributions from 1 January of the year in which they turn 18 years of age. Those who are not employed must start making contributions from 1 January of the year in which they turn 21 until they reach statutory retirement age. If an employed spouse pays contributions of at least twice the minimum amount, the contributions of the non-employed spouse are considered paid.
The amount you can draw as a pension is calculated based on your average annual income during the contribution period and the number of contribution years. If you have no gaps in your contributions, you are entitled to at least the minimum pension. For each missing contribution year, the OASI pension is reduced by 2.3%.
There may be gaps in your contributions. There are various reasons for missing contribution years: travel, emigration, studying, short periods of work, frequent changes of employer, divorce, retirement of a spouse and missing payments from employers.
The total number of required contribution years is 44 for men and 43 for women (with a statutory retirement age of 65 or 64 respectively).
You can find more information on the different life situations here.
Tip
You have five years in which to make up any pension shortfalls. If you miss this deadline, the alternative is to pay voluntarily into a pillar 3a or pillar 3b private pension plan.
Check whether you have any pension gaps and order your OASI statement free of charge from the relevant cantonal OASI (AHV/AVS) compensation office.
The Swiss pension system comprises two further pillars. Research these pillars too to ensure your financial security. You can find more details here.
Pension tips for every life situation
Whatever your situation in life, there are different aspects to consider if you want to live the life of your choice in old age. You can find the most important here:
Tips for young people
Who knows what the future will bring? Flexibility and independence are important to young people. Nevertheless, it makes financial sense to start saving for a pension early on. Find out why here.
Tips for young people
Travel without regret
More and more people nowadays are fulfilling the dream of taking a longer time-out, often to travel, even around the world. Find out here how this might affect your pension.
Tips for globetrotters
In your mid-life years
What you decide now will shape your financial future. When it comes to pensions, you need discipline and patience. We explain how to find the right strategy for you and your goals.
Tips for adults
Pensions for people with families
Being responsible for a family raises specific questions with regard to pensions. Find out here which solutions are available that fit your needs.
Tips for families
Your own home thanks to pension savings
The capital you accumulate by means of pension savings can help you realize the dream of owning a home. Find out here what to watch out for.
Tips for financing a home purchase
Self-employed and self-responsible
Entrepreneurial freedom brings with it extra responsibility for many things. If you want to save for retirement, you need greater discipline and more expertise. Here are some valuable tips.
Tips for self-employed people
How to prepare properly for retirement
When you retire, your financial situation will change significantly. The decisions you make now will determine your standard of living in retirement. We explain what matters.
Tips for retirees
Retirement: decision time
The time has nearly come for you to retire. Now you need to decide whether to withdraw your capital in one go or draw a monthly pension. We explain how to make the right choice.
Pension or lump sum?
The subject of pensions is complex. There is often not enough time to research everything in detail. If you wish, you can seek advice from our partner service Optimatis. Our experts have the information that you may spend a long time searching for. Benefit from their expertise by arranging a no-obligation consultation.
The independent partner service Optimatis and its qualified staff will work with you to establish a clear overview and produce a snapshot of your current situation. Optimatis can offer you the solution that best fits your needs from the wide range available on the market – a good reason to seek advice from an independent expert.
You just need to request an appointment and a specialist advisor will be in touch with you. During the meeting, you can decide how and whether you wish to proceed with the solutions proposed.
Have you started to save privately for retirement?
Pillar 3a: comparison of current interest rates
Tax calculator for the pillar 3a
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