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How much will my pension be when I retire?

In Switzerland, women receive OASI (Old Age and Survivor’s Insurance) state pension from the age of 64 and men from the age of 65. In addition, they may receive benefits from an occupational or private pension scheme. OASI, occupational pensions and private pensions are the three ‘pillars’ in the Swiss old-age pension system.

1st Pillar: OASI

How much will my OASI state pension be?

The level of your OASI pension depends on several factors:

  • the number of years you have contributed
  • the level of your income
  • any contribution credits you have received for bringing up children or caring for other persons.

Both employees and employers are required to pay contributions. Employee contributions are deducted directly from your salary.
To receive the full pension, you have to have contributed in full. This means you and your employer have made payments without interruption from the time you were 20 until the time you reach retirement age.

The level of the pension you receive then depends on your average annual income. The minimum and maximum levels are as follows:

  • You will receive a pension of CHF 1,175 per month if you have paid OASI contributions without interruption and your average annual income did not exceed CHF 14,100.
  • You will receive a pension of CHF 2,350 per month if you have paid OASI contributions without interruption and your average annual income was at least CHF 84,600.

By law, the maximum pension may not be more than twice the minimum pension.

What is the situation for married couples?

The following rule applies to married couples: each spouse’s income is added together and the total is divided by two to obtain the amount credited to each spouse.

This division of income is made:

  • if both spouses are entitled to an OASI or IV pension;
  • if a widow or widower is entitled to an old-age pension;
  • if the marriage is ended by divorce.

The sum of the two individual pensions may not exceed 150 per cent of the maximum single pension (i.e. CHF 3,525). If this maximum is exceeded, then the two individual pensions are reduced accordingly.

Do I have to wait until I reach OASI retirement age before I can retire?

In Switzerland, women receive an OASI pension from the age of 64 and men from the age of 65. Under the OASI and occupational pension schemes, it is however possible to take early retirement, starting from the age of 58. If you take early retirement though, your pension will of course be lower.

You can also postpone your retirement. There are numerous possible ways of doing this, each of which have a different impact on your income. Ideally, you should seek advice from your pension fund.

What can I expect to receive?

You can obtain an estimate of your own old-age pension online. Or you can ask for an estimate free of charge from your compensation office. In both cases, you will receive a provisional calculation. No binding calculation can be made before you reach retirement age.

AHV pension estimate tool

Request for the calculation of your future pension

2nd Pillar: Occupational pension

An occupational pension scheme is mandatory for all employees. It starts when you first get a job, from the age of 17 onwards. However, you have to be earning at least CHF 21,500 a year. Both employees and their employers are required to pay contributions. These are deducted directly from your salary.

The level of the pension depends on the contributions you make throughout your working life. Each pension fund has its own rules. All your contributions are combined to make up your retirement savings. The benefits can be paid as a pension or as a lump sum.

The pension is calculated using a conversion rate. The minimum rate is laid down by law. Currently it amounts to 6.8 per cent (for men and women who have reached the normal state retirement age).

Example

If you have accumulated retirement savings of CHF 400,000 during your working life and the conversion rate is 6.8%, your annuity will amount to CHF 27,200 a year, or CHF 2,267 a month.

3rd Pillar: Private pension

The 3rd Pillar comprises savings made with a view to retirement. Subject to certain limits, payments made into 3rd Pillar funds are tax exempt. There is no obligation to make payments to a 3rd Pillar scheme.