Social security and Swiss pensions

Christof Schürpf/Keystone

Swiss social security is split into three ‘pillars’, each with its own characteristics and goals that help retired people continue to finance their way of life after retirement. 

Employers participate in the funding of most insurances with the exception of health insurance, which, unlike in the United States’ employer-based system, is financed by each insured person who pays premiums based on their age and where they live.

The three pillars of the Swiss social security system are: Old Age and Survivors/Disability Insurance, an occupational pension plan, and private investment options.

First pillar

The first is a state pension plan that consists of various insurance schemes such as the Old Age and Survivors InsuranceExternal link (OASI), Disability Insurance, and Unemployment Insurance. OASI and disability insurance are mandatory for all Swiss residents.

Men, at 65, and women, at 64, are entitled to an old-age pension. Payments may be started earlier by one or two years, but a fee is charged per year advanced. Payments can also be postponed by one to five years, which gives an increase in payments depending on the number of months postponed. In some cases, beneficiaries of old-age pensions can get a pension for a child and/or for their spouse.

For basic facts on disability insurance please go hereExternal link.

Second pillar

The second pillar is based on occupational pension plans and accident insurance. Employees who earn more than CHF21,150 a year are automatically insured by a second pillar pension fund. Pension plans and accident insurance have been mandatory for all employees for more than 25 years. The self-employed can join on a voluntary basis. When combined with the first pillar benefits, a person could expect to earn about 60% of their final salary after retirement to help maintain their standard of living.

Self-employed persons, wage-earners with an employment contract whose duration does not exceed three months, family members on a farm, or persons who, according to the disability insurance scheme, have a disability of at least 70% may optionally contribute to second-pillar schemes but are not required to do so.

For more on social insurance in Switzerland please visit the Federal Social Insurance OfficeExternal link.

Third pillar

The third pillar is a private, individual option that workers can use to help make up the remainder of their income not covered by the first two pillars. Such schemes are also protected by law and often offer tax advantages. These typically take the form of a retirement savings account (with tax breaks) or a flexible savings account (few if any tax breaks).

See section on Work life, Salaries, Deductions for more information.

Unemployment insurance

All workers in Switzerland who have not yet reached retirement age are insured against unemployment. Contributions are split between the employer and the employee. To receive payments, the following conditions must be met:

• Have been employed for at least 12 months within the two years prior to requesting benefits.
• Have Swiss residency and a work permit.
• Be registered with the regional unemployment office.
• Be actively looking for a job.

Unemployment benefits typically amount to about 70% of your average wage over the last six months to a year. Average wages are capped at CHF12,350 a month. You must have made at least CHF500 a month to qualify. Insured persons with children may receive 80% of their average salary.

For more on social insurance in Switzerland please visit the Federal Social Insurance OfficeExternal link or the portal ch.chExternal link.

Health insurance

Purchasing basic health insurance is compulsory for everyone residing in Switzerland. Since basic health insurance premiums are not tied to income, Swiss authorities subsidise those who have trouble making the payments. For more information, please see section on Daily Life, Insurance, Health.

Bilateral agreements

Switzerland has concluded bilateral and multilateral social security agreements with EU and EFTA states, as well as 15 other countries. These social security agreements determine the rights and obligations of citizens in relation to the social security system of another signatory state. The aim is to ensure the equal treatment of citizens from both Switzerland and the other state. For more information on agreements with specific countries, see this official publicationExternal link.