Employee insurance

Employee insurance in Switzerland

Pillar 3 of the Swiss pension system

The pension system in Switzerland is based on two pillars: statutory pension insurance (known as AHV/IV) and occupational pension. The two pillars aim to allow everyone in retirement or suffering from a disability to maintain the standard of living they have achieved during their working life. In the event of death, the insurance also covers the maintenance of close ones. It is assumed that these two pillars should equal approximately 60% of the last salary.

Is employee insurance compulsory?

2nd pillar is not mandatory for everyone. Contributions to a 2nd pillar pension scheme are compulsory if you meet all of the following criteria:

• You are insured under Pillar 1 (i.e. you are subject to AHV insurance).
• You are at least 17 years old and have not reached the statutory retirement age; the pension insurance is effective from 1 January following reaching the age of 24 or, in case of disability or death, from 1 January after reaching the age of 17.
• Your annual earnings exceed CHF 21,510.00 (as of 2021).
   

How does the pension fund work, who and how often makes contributions and what are the rates?

Contributions to the pension fund are made monthly by both the employee and the employer. Over time, interest on the paid contributions accrues, creating a pension asset available upon retirement.

The contribution rate depends on the salary and age of the insured person. The contribution rate is always a percentage of wages. Depending on age, the ratio is as follows:

• 25 to 34 years old: 7%
• 35 to 44 years old: 10%
• 45 to 54 years old: 15%
• 55 to 64/65 years old: 18%