As of November 2023
This document is a consolidation of the Swiss pension system based on my research, particularly applicable to those working for Swiss companies. Situations may vary for those employed by companies outside of Switzerland or for freelancers.
Key Points
The Three Pillars of Swiss Pensions
The Swiss pension system, similar to many other countries, consists of three pillars. For employees, the first and second pillars are automatically deducted from the salary, with employers contributing a matching amount. The third pillar is voluntary.
1st Pillar: Basic Pension
This includes:
- Old Age and Survivors' Insurance: Contributions are made at 8.7% of the salary.
- Disability Insurance: An additional 1.4% of the salary.
- Income Compensation Allowances: Further 0.5% of the salary.
- Unemployment Insurance: Up to a salary of 148,200 CHF, the contribution is 2.2%, shared equally with the employer. Freelancers are required to pay the total amount.
2nd Pillar: Occupational Pension
Managed by the employer under the Occupational Pensions Act, the contribution rates range from 7% to 18% of the salary, mandatory for incomes exceeding CHF 21,150. The specifics may vary, and the author is currently verifying the details.
3rd Pillar: Private Pension
Comparable to private pension schemes in other countries, this can be contributed to through financial institutions. You can contribute up to 7,056 CHF annually, with a portion being tax-deductible.
Receipt of Pension
The method of pension receipt in Switzerland, when one subsequently returns to their home country outside of the EU/EFTA, depends on the period of contributions and the amount paid relative to the full pension:
If the Contribution Period is Less Than One Year
Likely ineligible for receipt.
If the Total Contributions Are Below 10% of the Full Pension
Eligible for a lump-sum payment.
If the Total Contributions Are Between 10-20% of the Full Pension
Choice between a lump-sum payment or pension.
Lump-Sum Payment Procedure
- A reimbursement request form must be submitted to the CDC Compensation Office in Geneva.
Conditions for Receipt of 2nd/3rd Pillar
You may opt for non-pension withdrawal methods in cases such as:
- Home purchase
- Starting self-employment or freelancing
- Departure to a non-EU/EFTA country, including repatriation
Considerations Upon Receipt
Transfer Fees
- Consider the impact of regular transfer fees. Utilize banks that offer fee-free international transactions to minimize losses.
Contribution Period and Pension Amount
- The first pillar pension amount ranges from 1,225 to 2,450 CHF. Fully contributing to the first and second pillars can result in a retirement income of 60% of the final salary. Note that each year of non-payment may reduce the pension by approximately 2.3%.
Pension Commencement Age
Currently, 65 for men and 64 for women, with discussions underway that may lead to an increased retirement age due to pension system pressures.
If You Encounter Difficulties
- Contacting the local Swiss Embassy may provide the most accurate and helpful information.
