Retirement provision in Switzerland: This is how you secure your future

The retirement provision is a central theme in Switzerland. The three-pillar system ensures a combination of state, occupational, and private provision. However, those who want to be financially secure in old age should act early and take additional measures. In this article, we explain how the system works, what options you have, and why it is important to take your retirement provision into your own hands.

1. The Three-Pillar System in Switzerland: An Overview

The retirement provision in Switzerland is based on three pillars that complement each other:

1st Pillar – State Pension (AHV)
2nd Pillar – Occupational Pension (Pensionskasse, BVG)
3rd Pillar – Private Pension (Pillar 3a & 3b)

While the first and second pillars are mandatory, the third pillar is voluntary – but essential for good retirement provision.

2. The 1st Pillar: State Retirement Provision (AHV)

The AHV (Old Age and Survivors Insurance) provides the basic security for all persons living and working in Switzerland.

Who pays in?

• All employees and self-employed individuals from 18 years

• Contributions are deducted directly from the salary

• Employers cover half of the AHV contributions

What is the amount of the AHV pension?

• The maximum pension currently amounts to about CHF 2,450 per month

• The minimum pension is around CHF 1,225 per month

• The amount depends on the paid contributions and years of insurance

Tip: Those who have gaps in their AHV contributions (e.g., due to stays abroad or missing payments) can make up these gaps retroactively for up to five years.

3. The 2nd Pillar: Occupational Pension (Pensionskasse, BVG)

The second pillar (BVG) supplements the AHV and is intended to secure the accustomed standard of living in retirement.

Who is insured?

• All employees with an annual salary of CHF 22,050 and above

• Employers and employees each pay half of the contributions

• Self-employed individuals are not mandatorily insured

What is the amount of the pension fund pension?

• The pension fund benefits depend on the paid contributions and interest rates

• The accumulated capital can either be paid out as a monthly pension or as a lump sum

Tip: Additional voluntary purchases into the pension fund reduce tax burden and increase retirement provision.

4. The 3rd Pillar: Private Retirement Provision (Pillar 3a & 3b)

Since AHV and pension fund are often not sufficient, private provision is crucial.

Pillar 3a – Tax-Advantaged Provision

Who can pay in?

• Employees in Switzerland

• Contributions are tax-deductible

Maximum contribution (2024):

• CHF 7,056 per year for employees with a pension fund

• CHF 35,280 per year for self-employed individuals without a pension fund

Benefits:

• Contributions reduce taxable income

• Capital remains tax-free until retirement

• Flexible investment options (savings solutions or funds)

Tip: Those who invest early in fund-linked pillar 3a accounts can benefit from better returns in the long run.

Pillar 3b – Free Provision

• No tax benefits, but no restrictions on payments or withdrawals

• Ideal for additional saving and investing in real estate, stocks, or life insurance

5. Why You Should Take Your Retirement Provision into Your Own Hands

The AHV and pension fund alone are often not enough to maintain an accustomed standard of living in retirement.

Problems in the Swiss Pension System:

• AHV under pressure: The increasing life expectancy and declining birth rates jeopardize the financing of the 1st pillar.

• Pension fund pensions are decreasing: Due to low interest rates and reforms, future pensioners often receive less benefits.

• Tax disadvantages without planning: Without targeted provision, you miss out on

• tax advantages and return opportunities.

Tip: Start early with private retirement provision to avoid financial bottlenecks later on.

Conclusion: How to Prepare Optimal for Retirement

A solid retirement provision is based on all three pillars. Especially Pillar 3a offers great tax benefits and more flexibility for the future.

✅ 1st Pillar (AHV): Basic security for everyone
✅ 2nd Pillar (BVG): Supplementary coverage for employees
✅ 3rd Pillar (Private Provision): Tax-advantaged saving & investing

Act now: Check your current pension situation and optimize your tax and savings strategy. We are happy to assist you with individual advice!