Occupational and state pension
Your first two pillars, in plain English.
In Switzerland you have a three-pillar approach towards saving for your retirement. Pillar 1 is AHV (German) / OASI (English). Pillar 2 is your BVG, the occupational pension. Pillar 3 is your 3a/3b.
Pillar 1
AHV (German) · OASI (English)
State pension
Compulsory for everyone working in Switzerland
Pillar 2
BVG · Occupational pension
Company pension
Compulsory above CHF 22,680 of yearly earnings
Pillar 3
Pillar 3a · Pillar 3b
Private provision
Voluntary — and tax deductible
Pillar 1
Old Age and Survivor's Insurance — the state pension.
This part of the pension is known as your Old Age and Survivor's Insurance (OASI), or state pension. It is compulsory for every person working in Switzerland to be registered for OASI and to contribute to this pension on a monthly basis.
Contributions are ordinarily around 5.2% deducted from your monthly salary, and your employer contributes the same percentage that you are contributing.
OASI works on a defined benefit scheme, meaning benefits are calculated on the time you have been contributing to the fund rather than on your actual contributions. In Switzerland a full term is seen from the age of 21 until retirement at 65.
5.2%
Your contribution
Of monthly salary
5.2%
Employer contribution
Matched, monthly
21 → 65
Full term
Defined benefit basis
Benefits under OASI
Assuming you have paid OASI contributions without interruption:
| Average annual income did not exceed CHF 15,120 p.a. | CHF 1,260 / month |
|---|---|
| Average annual income of at least CHF 90,720 p.a. | CHF 2,520 / month |
| Married couplesWhere the benefit does not exceed 150% of a single pension | CHF 3,780 / month |
Pillar 2
The occupational pension — where the detail matters most.
This part of the pension is known as your occupational pension, or company pension. The moment your yearly earnings are more than CHF 22,680, this part also becomes compulsory. You and your employer contribute to it, and contributions are automatically deducted from your pay sheet or salary statement.
This pension works as a defined contribution scheme. Its value is determined by the contributions you and your employer make, plus the interest received during the term.
Retirement age for this pension can start at 58 or 60 — but doing so reduces your benefit considerably.
Your conversion rate turns your Pillar 2 capital into an annual income. It has been falling — which is the single most important number in your occupational pension.
A few years back
Typical at age 65 today
Possible by your retirement
Benefits in short
- You receive risk insurance benefits — life and disability cover.
- Orphan and widow pensions are also included.
- At retirement you have the option to convert your pension into a monthly income or take the lump sum.
- Your conversion rate is used to calculate your annual income: less if you retire early, more if you retire later. At age 65 the rate for many companies is around 5.8% — so for every CHF 1 million you hold you receive an income of about CHF 58,000 p.a. A few years back this rate was 9%; it may reduce to 4% by retirement.
- Accident insurance (UVG) and daily sickness benefits (KTG) are also included under this topic.
Next
And then there is Pillar 3.
Pillars 1 and 2 are largely decided for you. Pillar 3 is the part you control — voluntary, fully tax deductible, and the usual place to repair a shortfall that the first two pillars leave behind.
Book a consultation
Find out what your pension is really worth.
Send us your pension certificate and salary statement, and we will come back with a documented breakdown — cover limits, fine print and the retirement income it currently buys.