The 3-Pillar System: Your Foundation for a Secure Future
Swiss retirement provision is based on three strong pillars that complement each other.
The Danger of the Pension Gap
Many blindly rely on obligatory contributions being sufficient to maintain their accustomed standard of living in old age. But reality often looks different: The 1st and 2nd pillars usually only cover about 60% of the last income. Without personal initiative, financial difficulties threaten in old age.
The AHV Check: Request an individual account statement (also called IK statement) from the compensation office (SVA) every few years. Contribution gaps, for example due to stays abroad or studies, can only be paid retroactively within five years. If you miss this deadline, your pension will be reduced for life.
How the Three Pillars Work for You
The system is logically structured but requires active management at the third level:
- 1st Pillar (AHV): State subsistence security. Everyone pays in, everyone receives a basic pension.
- 2nd Pillar (BVG): Occupational pension. You and your employer save capital together for your pension.
- 3rd Pillar (3a/3b): Private responsibility. Here you decide on the amount and type of investment yourself – and additionally benefit from massive tax advantages.
Conclusion
Those who understand the 3-pillar system can act purposefully and need not fear retirement.
Frequently Asked Questions
3 answers about this topic
No, it is voluntary, but highly recommended for almost every employed person due to tax savings and closing gaps in the first two pillars.
The accumulated capital (vested benefits) is transferred to the pension institution of the new employer.
Usually not, if you want to maintain your current standard of living (travel, hobbies, home ownership).
Author
Adis Kavazovic
Head of Insurance & Financial Planning
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