Retirement pension in Switzerland
The Swiss retirement pension system is a three-pillar system that guarantees pensioners an adequate income when they reach old age.
1st pillar: Old-age and survivors’ insurance (OASI)
Old-age and survivors’ insurance (OASI) is a state pension scheme that is compulsory for everyone living or working in Switzerland. One half of the contributions are paid by the employee and the other half by the employer and are deducted directly from your gross salary. Self-employed people can take out voluntary insurance. The AHV pays a monthly pension to retirees. The pension amount depends on the contributions paid in. The AHV also pays widows’ and orphans’ pensions in the event of death.
2nd pillar: Pension fund
The occupational benefits provision (pension fund) is a company pension scheme which is also compulsory for employees earning over a certain annual salary. It is designed to ensure that the standard of living is maintained. The contributions are shared by employer and employee, with the employer paying at least 50%. The amounts are deducted directly from salary payments. Self-employed people can take out voluntary insurance. On retirement, the money saved in the pension fund is distributed either as a pension or as a one-off lump sum.
3rd pillar: Voluntary old-age provision
Voluntary old-age provision (3rd pillar) is private old-age pension provision. What is known as pillar 3a (“restricted or tied pension provision”) is subsidised by the state via possible maximum deductions from taxable income. It differs from pillar 3b, which is for unrestricted pension provision. Providers are pension institutions such as banks and insurance companies, and there are different models: from pure savings to investment, e.g. investment fund savings If possible, it is advisable to save money with the third pillar to ensure you have an additional financial cushion in old age.
Supplementary benefits
Older people who do not have sufficient money to live on despite their OASI pension and pension fund may be entitled to supplementary financial benefits. These benefits are paid out by the OASI office in the place of residence.
(Partial) invalidity
Anyone no longer able to work for health reasons is entitled to financial support through the invalidity insurance (IV) under certain conditions. The IV does not only pay out money, however. It mainly helps those insured to start or return to working life.
Invalidity insurance
Invalidity insurance (IV) is a state insurance that supports people who can no longer work for health reasons. Most adults in Switzerland have mandatory insurance and must pay contributions. For employees, the contributions are deducted directly from their salary each month. The employer pays half of the contributions, the employee the other half. Self-employed people or anyone without a job must pay or insure their contributions themselves.
Who receives support?
People unable to work or who can only work part-time for at least one year for health reasons (physical or mental) are entitled to IV support. The IV pays out the support as a monthly pension. The IV also helps people with disabilities or health conditions to find a new suitable job.
Supplementary benefits
People who still have insufficient money to live on despite IV support are, under certain conditions, also entitled to financial supplementary benefits. These benefits must be applied for at the OASI office in the place of residence.
Sickness and accidents
Health and accident insurance are important pillars of the Swiss health system. It is a legal requirement in Switzerland to have health and accident insurance. These insurance policies provide financial support and benefits when someone is sick, has an accident or is pregnant.
Health insurance – basic insurance
It is obligatory to have health insurance in Switzerland. It is also called basic insurance. Basic insurance covers the costs of medical treatment, hospitalisation and other expenses in the event of illness or pregnancy. It is available from numerous private health insurance companies. Insured persons are free to choose which health insurance company they insure themselves with. The health insurance companies must accept anyone residing in Switzerland. Each autumn, the premiums for the next year are set. It is worth comparing policies and, if necessary, switching to a different health insurer.
Accident insurance
Switzerland has compulsory accident insurance that covers the costs of medical treatment, hospitalisation and other benefits in the event of an accident. Employees are automatically insured against accidents if they work longer than 8 hours per week. The insurance is provided by the employer and also covers accidents during non-working hours, with the employer covering the costs of occupational accident insurance and the employee paying for non-occupational accident insurance. Self-employed people and those not working must take out accident insurance themselves. Persons who do not work can insure themselves against accidents with their health insurance company. Self-employed people can also take out accident insurance with other insurance companies.
Premium reduction scheme
For many people, the cost of compulsory basic health insurance can be a major financial burden. In order to lessen this burden, Switzerland has a system called the premium reduction scheme. Premium reduction is financial support from the state for health insurance premiums. It applies to people whose income and assets are below certain thresholds. The threshold levels vary from canton to canton. The premium reduction must be applied for again every year.
Unemployment
All employees in Switzerland are insured against becoming unemployed. Anyone becoming unemployed usually receives financial support for a set period of time. Unemployed persons must register with the regional employment centre (“RAV”). The centre helps people to find a job and also supports further training.
Unemployment insurance
Switzerland has a state unemployment insurance scheme that alleviates the financial consequences of unemployment. It is compulsory for all salaried employees. The unemployment insurance is financed by contributions from the insured person and the employer. Contributions are deducted directly from the employee’s pay.
Anyone who loses their job receives a monthly income replacement pay (unemployment benefit) from an unemployment fund. The amount of unemployment benefit is determined by various factors, for example, how long a person has been unemployed, how much they earned before becoming unemployed and their age.
What to do when unemployed
Anyone who becomes unemployed must register with the regional employment centre (RAV) to claim unemployment benefits. Registration must be completed as soon as possible, ideally during the notice period, but no later than the first day of unemployment. After registering online, the regional employment centre (RAV) contacts the unemployed person to arrange an appointment for the registration interview.
Regional employment centre
The regional employment centre (RAV) offers unemployed people various support services to help them find a new job. Advice sessions at the regional employment centre are compulsory for anyone who is unemployed and receiving unemployment benefits. During these consultations, unemployed people get help to optimise their application documents and prepare themselves for job interviews.
Comprehensive government information for immigrants in the canton of Lucerne
Through its website gruezi.lu.ch, the canton of Lucerne offers more wide-ranging information in more than ten languages. The website contains a lot of information aimed at making it easier for immigrants to integrate.
The citizens’ portal ch.ch is an information service provided by the Swiss authorities. Presented in five languages, ch.ch provides easy-to-understand answers to questions that people often ask the authorities.
- Welcome to the canton of Lucerne:
Grüezi – canton of Lucerne - Simple answers about living in Switzerland::
ch.ch, the website of the Swiss authorities
