Switzerland is noted around the world for the strength and flexibility of its pensions system to assist in old age. The system combines funding from the government, contributions through your work contract and salary, and private pension plans.
What is the retirement age in Switzerland?
The retirement age in Switzerland is 65 years for men and 64 years for women, although the retirement age for women will be gradually increased to 65 between 2024 and 2028.
Swiss pension system
The Swiss system is designed so that money from work, the government, and private savings are paid toward a pension plan as soon as you acquire a residence permit. This system is divided into three pillars that make up a complete pension plan. These are:
- First pillar OASI pension
- Second pillar BVG pension
- Third pillar private pension
Swiss OASI pension
The Old-Age and Survivors Insurance scheme is the first pillar of the Swiss pension system. This is a mandatory government pension scheme that all Swiss residents must pay into from the age of (or 18, if employed) until they reach retirement age. Your contributions are topped up by your employer.
OASI pension contributions
Contributions to the Swiss OASI pension scheme vary according to your employment status. If you are looking for a job in Switzerland, you must pay 503 Swiss francs into the scheme each year. Freelancers must pay around 8 to 9 percent of their annual income to the OASI scheme.
People who are employed by a company must contribute 8,7 percent of their annual salary, with the other 8,7 percent coming from their employer. Contributions to the first pillar are tax-deductible when filing your tax return. The OASI pension can be claimed up to five years before, or five years after retirement age (provided you are working).
How much will I get from my Swiss OASI pension?
Typically, the amount you get from an OASI pension is determined by the length of the pension scheme and how much has been contributed. However, the OASI first pillar pension is capped at a maximum of 2.450 Swiss francs per month for individuals and 3.675 francs per month for married couples.
Swiss BVG pension
A Swiss Occupational Pension Fund (BVG) is a pension system where your employer must contribute a portion of your gross salary to a pension scheme. This is mandatory for all employees who earn more than 21.510 Swiss francs a year. These contributions are in addition to those made into the OASI scheme. Contributions to this scheme are also tax-deductible.
BVG pension contributions
Typically, an employer has to make a contribution based on your age and the time you have spent in Switzerland. This contribution is taken from the portion of a person's salary between 22.050 Swiss francs and 88.200 Swiss francs (as of 2023) - companies can voluntarily set a higher upper limit. These values vary by county (canton) but can be broadly summarised as:
- Ages 25 to 34 contribute 7 percent of gross salary
- Ages 35 to 44 contribute 10 percent of gross salary
- Ages 45 to 54 contribute 15 percent of gross salary
- Ages 55 to 64 / 65 contribute 20 percent of gross salary
When can I claim my Swiss BVG pension?
It is possible to claim the second pillar of your pension as soon as you are 55 years old. You can also wait up to five years after retirement age.
Pension income from claiming BVG pension
If you reach retirement age while in Switzerland, the annual BVG pension amounts to around 6,8 percent of the total accrued from all contributions to the scheme.
Can I pay more into a BVG pension?
Some expats may come to Switzerland in later life and have not had as much time to earn a sufficient pension through the BVG scheme as those who are younger. That is why many BVG pension providers allow you to invest money from elsewhere into the scheme. Contact your pension provider for more details.
Swiss private pension schemes
The final pillar in the Swiss pension system is for private pension plans. These are completely voluntary but can be used to gain assets or benefits such as insurance, retirement accounts and retirement funds. Some packages also offer discounts on private insurance, while others are intrinsically linked to life insurance policies.
How much can I pay into a private Swiss pension scheme?
There are limits to the amount a person can pay into a private Swiss pension. This is a maximum of 7.056 Swiss francs per year for someone who is employed. For the self-employed, the limit is 20 percent of annual income up to a maximum of 35.280 Swiss francs.
Claiming a Swiss private pension
Once again, you can claim a private pension up to five years before and until five years after the retirement age.
Pension income from a Swiss private pension
Pension income is determined by the amount you have paid in and the agreed-upon annuity from your provider. If an annual annuity has not been agreed upon, then all assets must be cashed out upon retirement.
Swiss taxes on pensions
Once you have started claiming on any of the three pillars described, the money will then be described as income and taxed as such.
Who inherits my Swiss pension?
A first pillar pension (OASI) cannot be inherited, but dependents of a claimant that has passed away are entitled to a “survivor pension”. This equates to the benefits of the claimant’s first pillar pension and will last until the dependent reaches maturity (18 years old).
Second pillar or a Swiss BVG pension can be inherited, depending on the policy chosen by the employer. In this case, it’s best to contact the employer or pension provider for more information.
Third pillar or private pensions can be inherited by succession, as dictated by a legal will and testament. In the absence of a will, spouses, kids, and legal heirs would have priority.
Swiss pensions outside Switzerland
Pension pillars can still be contributed to from outside of Switzerland, under certain conditions. These allow you to reap the benefits of a Swiss pension, wherever you may be.
Swiss OASI pension outside Switzerland
If you are a Swiss, EU or EFTA citizen, you can still contribute to an OASI pension outside of Switzerland, so long as you have been contributing to that pension for more than five years and you remain a resident of an EU or EFTA member state or live in a nation that has a social security treaty with Switzerland. If this is the case, you can claim a monthly pension benefit upon retirement. If you move outside of the EU, EFTA or treaty nation, you must cash the scheme out.
Swiss BVG pension outside Switzerland
If you move to a nation that is within the EU and EFTA, you can cash out your BVG pension when you leave Switzerland. If you move to a nation outside of the EU and EFTA, you are allowed to cash out your voluntary contributions to the BVG, but any compulsory benefits from your employer must be put into a vested benefit solution.
Private Swiss Pensions outside of Switzerland
Swiss private pensions do not have to be withdrawn and can be maintained in Switzerland wherever you go.
