Prepare for the future with individual and occupational pension provisions that are simple and flexible

What is the legal age for retirement?

Since 2005, the law on occupational pension provisions (LPP) specifies that men have the right to pension benefits as soon as they reach the age of 65 and women as soon as they reach the age of 64.

What is included in Pillar 1?

Pillar 1 includes the AVS (Old age and survivors’ pension), the AI (disability insurance) and the APG (allowance for loss of earnings in the case of military or civil service and maternity).

What is an occupational pension fund?

The occupational pension fund or Pillar 2 completes the AVS/AI/PC or Pillar 1. Together, the two insurances should allow those insured to maintain their previous standard of living to a great extent. The goal is to reach approximately 60% of the last salary when adding the two pensions together. (Definition provided by OFAS)

May part of the Pillar 2 capital be used before retirement?

It is possible to use part of the capital to purchase a primary residence. Take note however: these funds cannot be used to purchase a vacation home.

You may also use this capital if you start your own business and are therefore no longer mandatorily insured under the LPP. Finally, if you leave Switzerland you may recover your capital. In all these cases, you should contact your pension institution.

Can I withdraw the capital instead of an old age pension?

Active insured persons may take all of a part of their capital instead of an old age pension when they reach retirement age. The pension fund must be informed of this decision within the time limits specified.

How can I know the amount of the contributions?

The amount of the monthly contributions to be paid to the pension fund is shown on the personal pension provision certificate. You will receive an updated certificate at least once a year stating the amount of the contributions and the benefits.

If I have not always been insured with a pension fund, is it possible to fill in the gaps?

It is possible to fill in the gaps by repurchasing the missing time from the pension fund. The amounts repurchased give rise to a tax exemption. To determine the maximum repurchase amount, you should contact your pension fund.

 

N.B.: the capital is restricted for three years following each repurchase.

 

If you have used part of your capital to purchase a residence, you must have reimbursed the amount taken before your repurchases can be deducted from your taxes (except in the case of a divorce).

 

Those arriving from abroad may only pay a maximum of 20% of their revenues during the first five years.

Must the pension fund be informed in the case of divorce or marriage?

It is important to inform your pension fund of the change in your situation. In the case of a divorce, the LPP assets to be shared between the spouses are those acquired during the marriage. The assets acquired prior to the marriage are not shared. There is also a division when one of the spouses receives a disability pension or a Pillar 2 old age pension.

What amount does the employer pay towards the Pillar 2?

The occupational pension provision or Pillar 2 is financed on the basis of parity between the employer and the employee.

What is the minimum salary that must be insured under the LPP?

Anyone who receives an annual salary of over CHF 21,510 in 2021 from the same employer must be insured under the LPP. The insurance for death and disability risks begins on 1 January following the date of the person’s 17th birthday. Savings for an old age pension begin on 1 January following the date of the person’s 24th birthday.

You would like to understand better and keep these figures at hand?

Discover the key figures of the LPP in 2021

If someone is unemployed, are they still insured under the LPP?

Those who receive unemployment indemnities and whose daily salary is over CHF 82.60 are compulsorily insured with a substitute LPP institution for disability and death risks and also for old age pension. The person insured and the unemployment insurance each pay half of the contributions. For an unemployed person, the termination benefits must be deposited with a vested benefits foundation (bank or insurance), or directly with a substitute LPP institution.

 

For an old age pension, it is possible to maintain coverage on a voluntary basis. The pension fund institution should inform those concerned of this possibility. The insurance can be maintained with the same pension fund institution, if the regulatory provisions allow – which is rare – or with a substitute institution. The costs arising from the maintenance of the pension provisions on a voluntary basis are entirely at the expense of the person insured.

 

For persons over 58 years of age who find themselves unemployed, please see our article: continuation of pension provision in the event of dismissal after the age of 58 . 

Questions on individual pension provisions