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The three-pillar model of the Swiss pension system.
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AT A GLANCE
Switzerland’s retirement, survivors’ and disability pension system is based on three pillars: pillar 1 is the state pension, pillar 2 is the occupational pension and pillar 3 is voluntary private retirement provision.
What is the three-pillar principle?
The three-pillar principle is the basis of Switzerland’s social security and pension system. For that reason, it is guaranteed by the Federal Constitution. The three-pillar model builds up each person’s provisions for retirement, disability and death over many years and decades. Here is a simple guide to the Swiss pension system:
Pillar 1 – the state pension
Pillar 1 of the Swiss pension system is the state pension. It is intended to ensure a minimum standard of living.
What does pillar 1 include?
Pillar 1 consists of:
- Retirement and Survivors’ Insurance (AHV)
- Disability Insurance (IV) and supplementary benefits
- The loss of earnings compensation scheme (EO)
Via the Retirement and Survivors’ Insurance (AHV) and the Disability Insurance (IV) schemes, the state pays benefits that ensure a minimum standard of living – for life in old age, in the event of disability and for the survivors after the insured person’s death. In addition, pillar 1 also provides loss of earnings compensation (EO) for military service and maternity and supplementary benefits. With this system, Switzerland fulfils its most important obligation as a welfare state.
Pillar 2 – occupational pensions
Occupational pensions are the second pillar in Switzerland’s three-pillar system. Employees with an annual salary of more than CHF 22,680 are generally insured against the risks of disability and death from 1 January after their 17th birthday (as of 1 January 2026).
And from 1 January after their 24th birthday, they are additionally insured for retirement benefits until they reach retirement. Occupational pensions are intended to ensure that insured persons and their families can maintain their accustomed standard of living in old age, in the event of disability and after the insured person’s death.
However, the benefits from the first two pillars generally amount to only 60% of the insured person’s final salary. It is therefore advisable to make private provisions in pillar 3 as well.
Pillar 3 – private retirement provision
Consisting of pillars 3a and 3b, private retirement provision forms the third pillar of Switzerland’s three-pillar concept. All people working in Switzerland can pay up to a maximum amount into pillar 3a and thus save tax. Pillar 3b is an unrestricted form of retirement provision. Anyone can pay money in and there is no maximum limi
Pillar 3 payments are voluntary. They are used to make up specific income shortfalls in the event of retirement, disability or death. Use our pension check to discover whether there are any gaps in your personal pension provision. Alternatively, you can arrange a personal pension consultation to find out more.
Erika
Senior Segment Manager Corporate Customers
Senior Segment Manager Corporate Customers
Erika has a Master’s in International Relations and has been working in the insurance industry for four years. In her free time, she loves to hop on her bike, go swimming or get lost in the pages of an exciting book. She has a passion for languages and is currently discovering the secrets of Russian and Italian.
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