Welcome to the “Retirement” learning path!

Säule: 3a und 3b – die private Vorsorge

I’m Anna and I will guide you step by step along this learning path through the Swiss pension system.

Saving for old age, buying a house or becoming self-employed: pension planning not only determines the age at which you can retire, but also affects financial decisions throughout your life. Switzerland offers a proven system for pension planning that is built on three complementary pillars. However: This system is designed around the basic requirements of the majority and does not address individuals’ various life situations.

Gaps in employment and lower income – for example, due to part-time work – have a major impact on pension fund assets. And women are disproportionately affected: according to the Federal Statistical Office, in Switzerland, they have around 31% lower income in retirement on average than men (as of 2024). This difference is referred to as the gender pension gap.

And this is why it is all the more important for women to set themselves up for retirement as early as possible. This will allow you to live the life you want in your old age.

In this first module, we will look at how the Swiss pension system and its three pillars work – so you can tackle your pension planning in a targeted manner and feel good about it.

The gender pension gap: what’s behind it?

Why do women receive lower income in retirement than men on average? This has to do with individual life situations on the one hand, and on the other, with a system that was shaped for a long time by traditional gender roles. Today, the reality is this:

  • Lower income: Women often work in industries with lower incomes, and more frequently work part-time. However, in Switzerland, women in comparable positions still earn less on average than their male counterparts (gender pay gap). This results in lower payments into both the state (pillar 1) and occupational (pillar 2) pension, as well as fewer assets that would then be available for voluntary retirement savings in pillar 3.
  • Employment gaps: Compared to men, many women take breaks from their careers in order to care for their children or for relatives in need of care (gender care gap). These years in which women do not pay into the three pillars leave behind gaps in their retirement savings.
  • Dependence on a partner: Women who rely on their partner financially often receive half of the savings accumulated in the pension fund during the marriage in the event of a divorce (pillar 2).
  • Assets and investments: Women tend to be more cautious about investing – especially in their younger years. Plus, they invest their money more carefully. As a result, they may miss out on return opportunities that could make a major difference in their pension funds.
  • Life expectancy and care costs: Statistics show that women live longer than men on average. That means their pension fund assets need to cover a longer period of time as well as higher health care and care costs.

Start your pension planning early so you can look to the future with peace of mind. We will be happy to help.

Simply schedule a non-binding consultation with our experts.

Anna talks facts: figures you should know

Säule: 3a und 3b – die private Vorsorge
  • 1 in 4 women do not have a pension fund in old age because they never had income that was subject to compulsory insurance.
  • Women in Switzerland receive 31% less retirement income than men on average. That’s a difference of more than CHF 16,000 annually.
  • Women are nearly twice as likely to experience poverty in old age as men.
  • 6 in 10 women in Switzerland work part-time.
  • Women live around 3 to 5 years longer than men.
  • 7 in 10 women recommend starting to actively plan for retirement in your younger years.

The three pillars of the Swiss pension system at a glance

In order to find the best way to optimize your pension planning, it is important to understand how the pension system in Switzerland is structured.

Retirement in Switzerland is based on the 3-pillar system:

Pillar 1: AHV – the state pension system

Pillar 1 is comprised of old-age and survivors’ insurance (AHV), invalidity insurance (IV), and loss of earnings compensation (EO). AHV forms the foundation of retirement savings. Together with their employers, employees in Switzerland start paying into AHV from the 1 January after their 17th birthday; non-employed persons from the 1 January after their 20th birthday. Marginal employment (often referred to as “mini-jobs”) with an annual salary of up to CHF 2,500 is not subject to compulsory contributions unless the employee expressly wishes to contribute. The AHV pension is intended to cover the minimum subsistence level in old age. Furthermore, in the case of death, it covers benefits for the survivors.

You can learn more about pillar 1 and how to calculate your AHV pension in module 2.

Pillar 2: pension fund – occupational pension (OPA)

A pillar 2 pension fund is compulsory for employees earning above a certain annual salary threshold. Employers and employees both pay in together. The retirement savings in the fund are then available once the employee retires. In addition to the pension fund, compulsory accident insurance (AI) covers occupational accidents, occupational illnesses and – depending on the employee’s contract terms – non-occupational accidents as well.

You can learn more about pillar 2 and when it’s possible to withdraw funds before retirement in module 3.

Pillar 3: 3a and 3b – private retirement savings

For many people living in Switzerland, income from pillars 1 and 2 is not enough for them to maintain a comparable standard of living in their old age. With pillar 3, you have the following options to save voluntarily for old age:

  • Restricted pension provision (pillar 3a) offers tax advantages when you regularly pay into a special retirement account. Your 3a savings are essentially tied up until you retire. However, there are exceptions that allow you to withdraw funds earlier – for example, to purchase property, become self-employed or if you choose to emigrate.
  • In unrestricted pension provision (pillar 3b), you have more flexibility when it comes to savings – for example, you can choose a savings account or insurance – and you can withdraw the saved capital before you retire. Pillar 3b does not offer any tax advantages, however.
The three pillars of the Swiss pension system at a glance
You can learn more about pillar 3 in module 4.

The Swiss pension system is currently under pressure: the population is aging, meaning more and more older people are drawing pensions and fewer working people are paying into the system. Reforms such as raising the retirement age are under constant discussion.

Which makes it all the more important to plan for your retirement with pillar 3 early on and benefit from the effect of compound interest. After all: If you invest today, you can build up significant wealth over time thanks to compound interest, thus increasing your financial security in old age. We show you how strong this effect can be in an illustrative sample calculation in module 4.

Anna’s glossary: the most important retirement terminology with definitions

Säule: 3a und 3b – die private Vorsorge
  • AHV/pillar 1: AHV is the state pension provision. Everyone in Switzerland pays contributions into the fund over the course of their lives. They then receive a monthly pension once they reach retirement age.
  • Retirement savings: Your retirement savings are the money that you have saved in your occupational benefit scheme (your pension fund) over the years. They are made up of your contributions, contributions from your employer and interest. When you retire, you receive these savings as a pension, as a one-time payout upon request or some combination of the two.
  • OPA/pillar 2: The OPA is the law that governs occupational pension provision. Above a certain income threshold, employees automatically contribute retirement savings into a pension fund for later. You and your employer pay money into the fund every month.
  • Vested benefits account: The pension fund is determined by your employer. If you leave your employer, leave your employer’s pension fund and do not have a new pension fund, your pension fund assets will be transferred to a vested benefits account. As soon as you are employed in Switzerland again, your vested benefits account will be dissolved, and your assets will be transferred to your current employer’s pension fund.
  • Gender pension gap: The gender pension gap describes the difference in retirement income received by women and men. In Switzerland, women receive significantly less retirement income on average – for example, because they more frequently work part-time, earn less and have career gaps.
  • Life expectancy: Life expectancy shows how long people live on average. It is an indicator for the state of health of a population and the living conditions of a society, and is always changing. It is important in order to plan for retirement in the long-term. After all, the money you save for old age needs to last as long as possible.
  • Pension fund: A pension fund is an institution that manages the pension fund assets of its members (employees). Employees in Switzerland either start their own pension funds or join a pension fund. Both employers and employees pay into the pension fund together. Over the years, savings accrue and grow so that you can benefit once you reach retirement age.
  • Reference age: Reference age is the legal age of retirement as defined in the AHV. At the moment, it is 65 for men and women. However, you can also retire earlier or later.
  • Pension: Your pension is the income that you receive regularly (generally every month) once you retire. A pension generally comprises the AHV and – if applicable – benefits from the pension fund.
  • Pillar 3a: Pillar 3a is an opportunity to voluntarily set money aside for old age. You can do that, for example, with a pillar 3a account or by investing in a fund. You can pay up to a legally determined maximum contribution into the account every year. The amount you contribute is deducted from your taxable income.
  • Pillar 3b: Pillar 3b is another form of private retirement savings, but it is more flexible than pillar 3a: you can set aside additional funds, for example, in a savings account, in a fund or with an insurance. With the exception of certain life insurance products, the system does not offer any advantage from a tax perspective, but there are fewer restrictions on withdrawals. Pillar 3b is composed of a variety of pension products, such as life insurance, savings plans, investment funds and real estate, and serves as a complement to state and occupational pension provision.
  • Pension gap: A pension gap occurs when your retirement savings is not sufficient to cover your expenses in old age. With targeted planning, you can reduce this gap, and often close it before retirement age, thus covering all of your financial needs.
  • Compound interest: Compound interest is when the interest from capital investments is not paid out but rather added to the principal in order to generate more interest. Put simply: you earn new interest on the interest you’ve already accumulated. This allows the overall amount of your invested capital to grow especially quickly (compound interest effect). The compound interest effect is particularly great for long-term investments.

Plan today – for a secure tomorrow

Many people put off planning for retirement – but there’s no reason to. Here are three behaviors to avoid:

  1. You’re not informed about your retirement situation – whether it’s because you’ve put all your trust in pillars 1 and 2 or because you feel overwhelmed by the complexity of the system.
  2. You leave your pension planning entirely to your partner without knowing how much they’re setting aside and what kind of retirement assets you will have available once you reach retirement age.
  3. You don’t optimize your pension planning because you think it’s already too late or that it’s too difficult.

Pension plans can always be optimized – whether you’re a recent graduate, a young mother, self-employed or about to retire. What’s important is taking the first step now. After all, the earlier you start planning, the better you can take advantage of the opportunities afforded by the three pillars.

In Modules 2 to 4, you will learn the basics about the 3 pillars of our pension system. In module 5, we show you the concrete steps you can take to optimize your pension planning at every stage of your life.

Clients ask – Anna answers

Helpful tool

Retirement calculator

Will I have enough money in old age? The retirement calculator shows you whether you have a pension gap and how you can look to the future with peace of mind.

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