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Swiss Pension System

Swiss pension is fully and exclusively funded by pension contributions (not other taxes). Foreigners and Swiss citizens are treated equally. Pension is spread over three "Pillars"...

1ST PILLAR - State Pension

Frequently Asked Questions

The basic state pension (AHV/AVS) is covered by a 10.25% premium split equally between employer and employee.

The pension is paid up to 2'350.- per month from age 65 (men) or 64 (women) depending on years of service.

It also includes a limited permanent invalidity insurance. 

If leaving Switzerland but remaining in the EU this pension can be counted for eventual retirement if at least one year's premiums have been paid. The accrued funds cannot usually be otherwise paid out although there are agreements with some countries outside the EU. 












2ND PILLAR - Professional Pension

Frequently Asked Questions

The professional pension (BVG/LPP) covers employees from age 25 to retirement, whose annual salary is above CHF 21'150.- it varies up to 18% of salary, normally split equally between employer and employee.

It includes life cover and invalidity insurance.

Some employers will provide more generous schemes (up to 25% of the annual salary can be allowed).
Voluntary tax deductable top ups can also be paid to make up for lost time in the system, which can lead to significant tax savings during higher income years. 

The funds can be paid out or pledged to finance house purchase (anywhere), to fund a self employment startup, or on leaving the EU. (Only the voluntary part can be paid out if leaving Switzerland but remaining in the EU.)

There is a witholding tax to pay on funds paid out (typically 6%).

3RD PILLAR - 3a/3b Savings

Up to CHF 6'768.- can be paid into an approved "3a" pension savings scheme.

The risk profile of the qualifyng savings schemes is far less restricted than the 2nd Pillar schemes.

The funds can be paid out before retirement or pledged for financing property purchase.

If leaving Switzerland it is possible to pay these schemes out.

There is a moderate witholding tax to pay on funds paid out (typically 6%).

There is a further "3b" category of pension savings which offers no direct tax advantage and is not restricted as described here for the "3a" schemes. 











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