Swiss Pension System

The Swiss state pension amount is based on the number of years during which the minimum contributions were made to the Swiss AHV funds.

At the chosen retirement age EU expatriates will report their earnings in other qualifying EEA countries (including Switzerland) to their State pension office together with the relevant insurance number. If contributions were made over more than 12 months in a given country that country will then directly pay a pension to the individual based on the contributions that were made. Note: since Nov 2021 the UK was once again recognised, post Brexit, in Switzerland due to a bilateral agreement.

You cannot elect to do this. However if the amount of pension is very low and does not justify the admin costs, the Pension office can choose to pay out a capital lump sum instead of a regular pension.

In Switzerland, retirement can occur between 60 and 70. 65 is default for men, 64 for women (increasing to 65). The later you retire the larger the annual pension you get, because you have less long to live on average.

However, years worked after reaching state pension age do not count toward the total contribution years upon which the pension is based.

Yes, if you die your spouse receives a spouse’s pension (if you have contributed for at least 12 months).

You need to apply to the State Pension (AHV) Office with your AHV number, which will have been given to you when you were first employed in Switzerland. You can apply on line and the report is free of charge once every five years.

Swiss state pension, together with some cover for disability pension is funded via a premium (10.6% of gross salary in 2022) paid equally by the employer and employee.

Switzerland provides for pension in three categories (or pillars). They integrate into this the long term invalidity, widow’s and orphan’s compensation for loss of earnings in the event of sickness, injury or death. More details on the three pillars. The second pillar is the Swiss Professional Pension, which is offered by private pension companies under the supervision (and guarantee) of the state.

Anyone with an annual salary above CHF 21’150.- and an employment contract that extends beyond three months must have at least the minimum compulsory cover. The time rule applies to employment with a given employer regardless how long you already worked in Switzerland.

If you have a contract less than three months that is extended, the cover applies from the date the extension is signed. If you leave and return within 3 months, the new contract is considered an extension to the previous contract for this purpose and the pension is applied from the beginning of the new contract.

Pension based on salary up to CHF129’060 per annum (in 2022) is guaranteed by the Federal Government. For this reason the pension management team can only invest this portion of pension capital in instruments allowed by the Federal government (chosen to minimise risk). The pension premiums are guaranteed from the month of payroll, even if the employer becomes insolvent before paying the premiums.

Funds above this limit are not guaranteed by the Federal government and are therefore much less closely controlled. Some such funds even allow the employee to decide where his/her funds are invested.

Either as a capital lumpsum, or as an annuity. Currently the annuity rate on the BVG minimum funds is set by the state and is expected to drop in the near future. The Supermandatory funds are not so regulated and the conversion rate tends to be a few percent lower.

Retirement for professional pension can be between age 60 and 70 in Switzerland. You can continue to work once retired and can also contribute further to pension (but do not have to).

Yes, pension capital can be paid out:

* to (re)finance your primary residential property (worldwide)
* if you become self employed
* if you leave the EU (if you only leave Switzerland just the super-mandatory part)

A withholding tax is levied from your your canton (or if you already left, the canton in which the pension fund resides). In Zürich (in 2018) this ranges from 6% at CHF 25’000 to 8.6% at CHF 750’000, thereafter 8.3% on holdings above CHF 950’000.

If over 50 years old the amount that can be paid out for financing property is limited to the amount saved before reaching age 50, or half the total amount saved at the time of withdrawal.

Once capital is paid out it is no longer possible to deduct extra capital purchases from taxable income, until this capital is repaid. When such capital is repaid, the tax previously withheld when it was paid out, is refunded.

Note that Accurity’s scheme also pays the capital out if the capital accrued during your employment does not exceed one year’s worth of employee premiums.

Based on premium shortfall due to career years where you were not paying premiums in Switzerland you can top up your pension and this can be deducted from income on your Swiss tax return, resulting in a significantly lower tax bill. The pension company will show you how much you can top up on the tax certificate you receive when you join us.

If you move to a new Swiss employer the pension capital is transferred to their scheme. If you do not move immediately to a new Employer, and do not qualify to pay the capital out (see other questions in this FAQ to decide if you can) then the funds are placed in a vested benefits account by the pension company in your name. You can choose which account with which provider or bank. Some accounts invest more agressively with potentially more volatility and higher returns.

However when choosing an account beware of the rules for paying the capital out from that account, which may be more restrictive than those of your pension company.

For the Mandatory BVG or supermandatory capital there is no statutory waiting period, other than the time required for documents and payments to be processed.

For lump sum purchases there is a waiting period of three years from the date of making the purchase before this can be paid out.

In some circumstances this is possible but generally not straightforward, and depends on agreements between Switzerland and your country.

Yes, each of our pension plans cover you for longterm disability and your spouse and children in case you die. This cover also extends to a common law partner – for which a registration from is to be filled. The level of cover depends on which of our five pension plan options you choose.