Pensions & retirement age in Switzerland

Switzerland is noted around the world for the strength and flexibility of its old age pension system. The pension system in Switzerland combines funding from the government, contributions through your work contract and salary, and private pension plans, to provide financial benefits to workers once they reach statutory retirement age. This section looks at the three pillars of the system and answers some frequently-asked questions about claiming and withdrawing a Swiss pension.

What is the retirement age in Switzerland?

The retirement age in Switzerland is 65 years for men and 64 years for women, although the retirement age for women will be gradually increased to 65 between 2024 and 2028.

Swiss pension system

The Swiss system is designed so that money from work, the government, and private savings are paid toward a pension plan as soon as you acquire a residence permit. This system is divided into three pillars that make up a complete pension plan. These are:

• First pillar OASI pension
• Second pillar BVG pension
• Third pillar private pension

Swiss OASI pension

The Old-Age and Survivors Insurance scheme is the first pillar of the Swiss pension system. This is a mandatory government pension scheme that all Swiss residents must pay into from the age of (or 18, if employed) until they reach retirement age. Your contributions are topped up by your employer.

Swiss BVG pension

A Swiss Occupational Pension Fund (BVG) is a pension system where your employer must contribute a portion of your gross salary to a pension scheme. This is mandatory for all employees who earn more than 21.510 Swiss francs a year. These contributions are in addition to those made into the OASI scheme. Contributions to this scheme are also tax-deductible.

Swiss private pension schemes

The final pillar in the Swiss pension system is for private pension plans. These are completely voluntary but can be used to gain assets or benefits such as insurance, retirement accounts and retirement funds. Some packages also offer discounts on private insurance, while others are intrinsically linked to life insurance policies.

Creating a retirement plan

Most people in Switzerland will combine two or even three types of pension plans to ensure they have adequate financial security in old age. A financial advisor in Switzerland can help you with pension planning, and ensure that you make the most of the financial incentives on offer.

Taxes on pensions in Switzerland

Swiss pensions are taxable. Once you start withdrawing a pension in Switzerland, no matter whether it is pillar one, two or three, the money will be considered income and taxed as such. You can find out more about how different types of Swiss pensions are taxed via the guides above. 

Early retirement in Switzerland

Generally speaking, early retirement is possible in Switzerland, although choosing to retire early may affect the overall value of your pension. The rules differ depending on which type of pension provision you have: 

• You are allowed to withdraw your pillar 1 pension up to two years before you reach statutory retirement age, but this will reduce your overall pension payments by 6,8 percent per year.
• Depending on the rules of the fund you have chosen, you may be able to get an early payout of your BVG pension from age 58, but this will likely result in a reduced payout. 
• Pillar 3a pension plans can be claimed up to five years before retirement age.
• Pillar 3 pension plans can only be cashed out on the date you choose for them to mature. If you choose to cash out early, you may face financial penalties. 

For more details on cashing in your pension early, consult the individual pension scheme guides above. 

Who inherits my Swiss pension?

A first pillar pension (OASI) cannot be inherited, but dependents of a claimant that has passed away are entitled to a “survivor pension”. This equates to the benefits of the claimant’s first pillar pension and will last until the dependent reaches maturity (18 years old).

Second pillar pensions can be inherited, depending on the policy chosen by the employer. 

Third pillar pensions can be inherited by succession, as dictated by a legal will and testament. In the absence of a will, spouses, kids, and legal heirs would have priority.

The guides to first, second and third pillar pensions above go into inheritance rules for the different kinds of pensions in more detail. 

Withdrawing a Swiss pension outside Switzerland

Pension pillars can still be contributed to and withdrawn from outside of Switzerland, under certain conditions. These allow you to reap the benefits of a Swiss pension, wherever you may be.

For more information on contributing to or withdrawing a pillar one, two or three pension, consult the individual guides above.