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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.
The level of your OASI pension depends on several factors:
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.
By law, the maximum pension may not be more than twice the minimum pension.
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:
The sum of the two individual pensions may not exceed 150 per cent of the maximum single pension. If this maximum is exceeded, then the two individual pensions are reduced accordingly.
In Switzerland, women receive an OASI pension from the age of 64 and men from the age of 65. Under the OASI scheme, pensioners can draw their pension one or two years before retirement age. Under the occupational pension scheme, it is possible to take early retirement (starting from the age of 58). If you draw your pension early, it will of course be lower.
You can also defer drawing your OASI pension by a minimum of one and a maximum of five years. This increases the amount of pension you receive each month. You can also defer drawing your occupational pension. 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.
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.
An occupational pension scheme is mandatory for all employees. It starts when you first get a job, from the age of 17. However, you have to be earning at least CHF 21,330 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).
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.
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.