Pension system in Switzerland

For a full pension (which is between 1175 and 2350 CHF per month), it is required that the insured person pays into the 1st pillar every year from age 20 to 65 (or 64 for females).

In daily life, it is more often referred to as “the second pillar” (German: die Zweite Säule, French: le deuxième pilier, Italian: il secondo pilastro).

Pension funds are organised as foundations, which then invest in real estate, government bonds, and company shares.

The funds in the second pillar can be used before retirement to buy a principal home, to start an independent activity, or when leaving Switzerland permanently.

When unemployed, the funds are transferred into a savings account (so-called Freizügigkeitskonto in German, compte de libre-passage in French, and conto di libero passaggio in Italian).

These cuts then may have to be recouped by state-funded Ergänzungsleistungen (prestations complémentaires) in order to guarantee a life in dignity.

1st pillar funds will be paid as usual, in monthly annuities, to people retiring in a foreign country.

This has led to issues with people using up their funds abroad, and then receiving the above-mentioned Ergänzungsleistungen upon returning to Switzerland.

To be eligible for Ergänzungsleistungen benefits, one needs to be a legal resident of Switzerland, and needs to have paid into the 1st pillar for single year.

In the current workforce, there are growing fears their 1st pillar pensions will not suffice to retire while keeping their standard of life.

[8] The Federal authorities have put forward a global reform scheme (called Prévoyance 2020 in French, Altervorsorge 2020 in German and Previdenza per la vecchiaia in Italian) encompassing the first and the second pillar.

[9] The federal authorities propose to The project had been accepted by a narrow margin at the parliament, but eventually failed to be approved after a citizen referendum held on September 24, 2017 rejected it.

[11] The Swiss pension system was ranked fifth best in the world in a study released by the University of Melbourne and Mercer in 2014, after the Danish, the Dutch, the Australian and the Swedish ones.