The pension system in Switzerland is based on the well-known 3-pillar principle. It is the intention of the authorities to the 1st pillar, called AHV / IV, to provide the citizens with a minimum subsistence when they retire. AHV is an abbreviation for “Alters- und Hinterlassenenversicherung”. IV is the abbreviation for “Invalidenversicherung”.
Who is covered by AHV/IV?
The 1st pillar includes all who either live or work in Switzerland. These people are by law compulsory insured and contributory. In practice this means for employees that the employer withholds AHV / IV contributions directly from the salary. Self-employed and not working the contrary on the other hand need to settle their contribution to the local “Ausgleichskasse”. The contribution that is calculated constitutes 10.1% of the gross salary and are usually split of 50/50 between employee and employer.
Below are the selected insurance covers for the 1st pillar:
- Retirement benefits
- Disabled´s children´s pension
- Spouse´s pension
- Orphan´s pension
- Disability insurance
When do the payments start?
The payments will start on the 1st of January after the age of 17 years. Note that in this regard it is not unusual for many newcomers to have so-called deposit gaps on their AHV / IV accounts. This means that if you have deposit gaps you cannot receive a full AHV / IV rate on pension etc. If you want an overview of the individual led AHV / IV account, you can order a bank statement from the local Ausgleichskasse. Alternatively, you can contact my-switzerland.info and through a pension analysis be informed about how you are insured and how much the personal AHV / IV interest rate constitutes.
Retirement age in Switzerland
The official retirement age in Switzerland is today 65 years old for men and 64 years old for women. In connection with a possible early withdrawal from the labour market, it is possible to start an ongoing payment from AHV of maximum two years before the official retirement age. It also means that the calculated AHV payment is reduced by 6.8% per year if you want the benefit pre-paid. Specifically, this results in an income change between CHF 460 and 10,100 per year.