3-pillar principle

Retirement provision in Switzerland

Your financial security in retirement rests on three pillars: state, occupational and private retirement provision. The three pillars complement each other and provide the best possible financial security.

The 3-pillar model

Pillar 1

State Pension

Old-age and survivors' insurance

Disability insurance

Supplementary benefits

Safeguarding of basic income

Pillar 2

Occupational Retirement Planning

Federal Law on Occupational Retirement, Survivors' and Disability Plans

Continuation of accustomed standard of living

Pillar 3

Private Retirement Savings

Restricted pension plan

Unrestricted pension plan 3b

Additional needs

Pillar 1 secures your subsistence needs

Pillar 1 is compulsory for everyone who resides or works in Switzerland. It covers basic subsistence needs in old age, provides you with insurance in case of invalidity and protects your surviving dependents in the event of death. Supplementary benefits are only paid out under specific circumstances.

Pillar 2 secures an appropriate standard of living

The occupational pension is compulsory for all employed persons with a yearly income of at least 21,150 Swiss francs (2018). Pillar 2 is intended to secure the accustomed standard of living. In combination with pillar 1, it should comprise around 60 to 70 percent of your last salary. Anything beyond this must be covered by private retirement provision.

Pillar 3 closes your provision gap

Pillars 1 and 2 often aren’t enough to sustain your accustomed standard of living in old age. Pillar 3 lets you close that gap. Payments are voluntary but you’ll also save on taxes with pillar 3a because you can deduct the payed-in amounts from your taxable income.

AHV pension and pension fund payments are generally not enough to sustain the accustomed standard of living in old age.

For example: Before retirement, you have a gross income of 80,000 Swiss francs a year. You've calculated that you’ll need roughly 65,000 francs a year to sustain your standard of living. Pensions from AHV and the pension fund only cover about 60 to 70 percent of your last salary. In this case, this would be 56,000 francs. You would thus have an income gap of 9,000 francs a year. To cover this, you should have access to additional capital of about 180,000 francs.

Do something good for your future: Deal with your retirement early and regularly. You can then best use all the options the three pillars offer – and look forward to a financially carefree retirement.

Good advice pays off

We’re glad to answer any questions you may have about pensions and will give you comprehensive advice – for example, on the following topics:

  • Will I have enough money when I retire?
  • How can I invest my money to get higher returns?
  • How can I finance my own home with pension funds?
  • How can I best plan my retirement to save on taxes?