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

The 1^st pillar includes AHV (Old Age and Survivors Insurance), IV (Disability Insurance), and APG (Compensation for loss of income due to military or civilian service, paternity or maternity).

Occupational pension provision or the 2^nd pillar supplements the AHV/IV/PC or 1^st pillar. Together, the two insurances should enable insured individuals to maintain their previous standard of living to a large extent. The goal is to achieve approximately 60% of the last salary when combining both pensions. (Definition provided by OFAS)

Active insured persons can receive all or part of their capital instead of the old-age pension at retirement. The pension fund must be informed of this decision within the specified deadlines.

The amount of contributions paid monthly to the pension fund is indicated on the personal pension certificate. You receive an updated certificate at least once a year, detailing contributions and benefits.

It is possible to fill in these gaps by making additional contributions to the pension fund. These amounts qualify for a tax deduction. To find out the maximum amount of additional contributions, you need to contact your pension fund.

Note: The capital is blocked for 3 years after each additional contribution.

If you have used part of your capital to purchase property, you must repay the amount withdrawn before your additional contributions are tax-deductible (except in case of divorce).

People coming from abroad can contribute only up to 20% of their income, and only during the first 5 years.

It is important to notify your pension fund of any changes in your situation. In the event of a divorce, the division of LPP assets between spouses concerns assets acquired during the marriage. Assets acquired before the marriage are not divided. There is also division when one of the spouses receives a disability or old-age pension from the 2^nd pillar.

Occupational pension provision or the 2^nd pillar is financed on a co-financing basis by the employer and the employee.

Anyone earning an annual salary of more than 21,510 francs from a single employer in 2021 must be mandatorily insured with the LPP. Insurance for death and disability risks starts on January 1 following the person's 17th birthday. Old-age savings begin on January 1 following the 24^th birthday.

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Individuals receiving unemployment benefits with a daily salary exceeding 82.60 CHF are mandatorily insured with the supplementary LPP institution for disability and death risks, but not for old age. The insured person and unemployment insurance each pay half of the contributions. The exit benefit for unemployed individuals must be deposited with either a vested benefits institution (bank or insurance company) or directly with the supplementary LPP institution.

For old age, optional coverage can be maintained. It is the responsibility of the pension institution to inform those affected of this possibility. Coverage can be maintained either with the same pension institution, if regulatory provisions allow - which is rare - or with the supplementary institution. The costs of maintaining optional coverage are entirely borne by the insured person.

For individuals over 58 who are unemployed, check out our article:

Pillar 3 corresponds to a voluntary pension provision taken out with a bank or an insurance. It is a supplement to Pillars 1 and 2 through the constitution of a capital and an adapted risk coverage (if desired). For example, a bank account, shares or a life insurance.

Pillar 3a is a restricted pension plan open to all those who have gainful employment with a salary subject to the AVS. This product comes in the form of a bank account or a life insurance to which the employee pays contributions until they reach the age of their AVS retirement or five years earlier. They may take advantage of an important tax exemption as the premiums invested (according to certain modalities) may be deducted from taxable income (N.B.: as of 2021 the rules change for cross-border workers).

Pillar 3b is an unrestricted pension plan that is open to everyone, independently of their professional activity and place of residence. The product comes in the form of a bank account or a life insurance in which the amounts paid are not capped. The persons insured may (in principle) dispose of the funds they have paid into it at any time.
Depending on the Canton of residence, the annual premium (according to the maxima set according to the Canton), may also be deducted from the taxable income.

Employees affiliated to a pension fund institution may contribute a maximum of CHF 6,883 per annum to a Pillar 3a (figures for 2021). Independents who are not affiliated to a pension fund institution may contribute 20% of their income but a maximum of CHF 34,128 per annum as of 2021.
N.B.: these amounts are updated at the end of each year. You should therefore seek advice.

Whether it is a Pillar 3a or 3b, there is no minimum amount. It is always possible to increase or decrease the amount paid into a Pillar 3, depending on one’s budget.

A cross-border worker can open a Pillar 3. Please note however that as of 2021 a tax exemption is only possible if the worker obtains the statute of quasi-resident (90% of the household’s taxable revenues come from Switzerland).

It is important to think about one’s pension provisions as soon as possible to ensure a sufficient income on retirement. The Pillar 3 may be a good solution. We suggest that you consult one of our counsellors.