The Swiss pension system is based on a three-pillar system, which is an essential and specific element of the Swiss social security system. If you are a cross-border commuter working in Switzerland, you are affiliated to the Swiss pension system, hence the importance of understanding the challenges of the Swiss pension system.
Old-age and survivors' insurance (OASI), disability insurance (DI), unemployment insurance and income compensation allowance (EO/MSE) constitute the first of the three pillars of the Swiss social security system. Consult our guide on "the three-pillar Swiss system" for more information.
In this guide, we will analyze the first pillar of the swiss pension system, the OASI.
Old-age and survivors' insurance (AVS) is the main pillar of Swiss social security and it primarily aims to partially compensate for the fall or loss of income related to a cessation of activity, whether for retirement, disability or even in the event of death, in order to guarantee a minimum standard of living.
The first pillar is constituted of:
The contribution rates for the first pillar in 2019 are the following:
Up to a limit of 148,200 francs, the contribution rate to the AC is 2.2% of the determining annual salary. On the part of the salary above 148,200 francs, the contribution to the AC amounts to 1% of the determining annual salary (without limit).
The employer deducts half of the contributions from your salary and remits this amount with its share to the compensation fund.
The OASI is based primarily on a distribution system based on solidarity between generations. Thanks to a generation contract, the working population finances the retired population through a distribution process. The contributions are then redistributed in the form of benefits to the beneficiaries. Solidarity also exists between rich and poor, the wealthiest pay more contributions, while the less well-off receive benefits that are high compared to their own contributions.
In Switzerland, all women and men who are salaried in the country, including cross-border workers, must be insured with the OASI. Half of the OASI contributions are paid by the employer and half by the employee (directly deducted from the salary). It is also compulsory for all those who live in Switzerland, from 1 January following the age of 17, or from 1 January following the age of 20 for those who enter working life after the age of 17, until retirement age.
In order to beneficiate OASI’s pension, you must meet the following conditions first:
The amount of the retirement pension depends on several factors:
The pension ceiling depends on your marital status, CHF 2,350 for single people and CHF 3,525 for a married couple.
You can estimate your pension online with an online pension simulator or contact your compensation fund to obtain a free estimate, but in both cases it is a calculation with an indicative value. The further into retirement, the more uncertain the estimated amount is due to the unpredictable change in the cost of living. Your pension can only be calculated definitively at the time of your retirement.
For a man, the retirement age is 65 years and for a woman 64 years. However, the receipt of the OASI pension can be anticipated or postponed:
For more information about OASI, consult the information center OASI.
The thirteen-digit OASI number is anonymous and will be with you for the rest of your life.