Individuals


1st PILLAR

  • State-run provident measures (Old -age, survivors and invalidity insurance - to cover basic needs)
  • Also called AVS in French or AHV in German
  • Mandatory for every employee

2nd PILLAR

  • Occupational
  • Pension plan (Complementary, Old -age, survivors and invalidity insurance)
  • Also called AVS in French or AHV in German
  • Mandatory for every employee

3nd PILLAR

  • Mandatory for every employee
  • Not complusory, only on a voluntary basis

The old age and survivors' pension (AHV/AVS, 1st pillar):

The age required to benefit from a Swiss AHV/AVS old age pension is 64 for women and 65 for men. It is possible to claim a reduced pension one or two years before retirement age.It is also possible to postpone the old age pension for 5 years at maximum and claim an increased pension. The minimal period of insurance to claim a Swiss pension is 12 months. The calculations will be based on:

  • The total insured revenues on which contributions have been paid
  • The number of years of insurance
  • The contribution splitting during a wedding if relevant
  • The educational bonus for persons who have been raising children.

The number of years of contributions to claim a full pension is 44 or 45 years-old. If the individual has worked less, the pension will be prorated accordingly. The minimal old age pension in Switzerland is 1'175 CHF per month (2015), the maximal is 2'350 CHF per month (prorated according to the number of years of contributions - 2015).

The occupational pension plans - 2nd pillar:

BVG/LPP pension plans are mandatory for Employees. They are offering old age pensions but also complementary pensions for children, survivors' and invalidity pensions.

It is not possible to get the mandatory part of the BVG/LPP savings paid cash when leaving the country since May 2007 unless leaving Switzerland for good for a country with no social security agreement. In other cases the funds are blocked on a vested benefit bank account or insurance policy until retirement age. It is still possible to use the funds to negotiate mortgages to buy a property as a main domicile. It may also be possible to get the funds paid cash in case of a company creation (the person should stop being eligible to 2nd pillar, ie have an independent activity).

Personal savings - 3rd pillar:

The third pillar is based on personal savings. In certain cases the amount placed on the personal savings account can be deducted from source taxes. Employees can place at maximum 6'768.– per year on their personal savings account (2015).

Trying to make assumptions on the social insurance systems coordination is time consuming and can lead to wrong expectations. Leora Human Capital can support you in order to get a better understanding of the Swiss retirement pensions. We can help you to find relevant information and simulate your old age pension. We can help you to assess your BVG/LPP plan coverage and measure its efficiency in terms of old age, survivor's or invalidity pensions. We can help you in order to transfer/look for lost vested benefits. We can support you to open a 3rd pillar bank account and request a source tax correction if relevant.

Latest news

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Switzerland agrees banking transparency

Switzerland agrees banking transparency

Jan 1, 2017

The international convention on the automatic sharing of banking information entered into force on January 1. This announces the beginning of the end of the country’s reputation as a tax haven. Such automatic information exchanges are aimed at bringing an end to Switzerland's long-cherished banking secrecy practices and help prevent foreigners from stashing undeclared income in Swiss banks.

The Swiss parliament is meanwhile expected to give the green light before the end of the year to similar accords with Iceland, Norway, Japan, Canada, South Korea and the British crown dependencies of Jersey, Guernsey and the Isle of Man.

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Will it be easier for young foreigners to become Swiss?

Will it be easier for young foreigners to become Swiss?

Jan 1, 2017

Young foreigners up to the age of 25 who were born in Switzerland and have been to school for five years in the country are eligible for the facilitated naturalisation. The requirement is that one of their parents must be Swiss-born and has to have spent at least ten years in the country. In addition, one of the grandparents must have had a resident’s permit.
If all of these conditions are met, a foreigner can apply for a passport under a legal amendment.
The decision by the Senate is the latest stage in eight years of debate on a proposal by a Social Democratic parliamentarian. The House of Representatives has already approved the amendments.

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