Who contributes to what?
The Swiss pension relies on a so-called "three-pillar system" embedded into the Swiss Constitution. The responsibility for pension contributions are shared between the State, the employer and the individual. Below is a diagram explaining which parts come for which pots and the needs each part is supposed to cover.
 AI/IV = Disability pension until retirement age
AVS/AHV = State pension at legal retirement age, i.e. 65 in Switzerland.
Both AI/IV and AVS/AHV contributions today are directly redistributed to the current cohort of pensioners. It is a pay-as-you-go system and AVS/AHV stands for "Old Age and Survivor's Insurance" (OASI).
PC/EL = supplementary allowance in case the pensioner's financial situation is insufficient to cover their basic expenses.
LAA/UVG = Accident insurance with loss of earnings tied to the individual employee.
LPP/BVG = Work pension, both employer and employee contribute to the employee's fund. It can include additional benefits depending on your employer's pension plan. The collected capital is invested and then converted into a pension at the employee's retirement age. It is blocked until retirement age, however can be cashed in earlier under specific circumstances (becoming self-employed, buying your principal residence property, leaving Switzerland for a non-EU/EFTA country).
Each employer has their own plan, therefore if you have had several employments in Switzerland, make sure to gather all your funds together. We can help you find out whether you have any dormant pots and regroup them.
Tied savings = Plan blocked until legal retirement age. Labelled as a '3a' plan on application documents.
Flexible savings = Plan with flexible duration and cash-in options. Labelled as a '3b' plan on application documents.
More information on the Swiss Confederation website →
Contact us to trace back your LPP funds or set up a third pillar plan →
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