The Swiss pension system is based on three pillars: Social Security (AHV / AVS), occupational pension plans and individual savings. While AHV / AVS is financed on a pay-as-you-go basis, capital is accumulated in the occupational pension plans.
The ordinary retirement age is 64 (females) / 65 (males).
In the Swiss social security (AHV / AVS) benefits are financed on a pay-as-you-go basis. While contributions must be paid on the whole salary, the maximum old-age pension is limited to CHF 28’680 per year.
Every company must provide occupational pension benefits for employees earning annual salaries of at least CHF 21’510. Annual salaries up to CHF 86’040 must be insured in the company pension plan. Savings contributions must be provided as from age 25 and amount to 7.0% up to 18.0% for legal minimum benefits, depending on age.
The Swiss pension funds are allowed to insure annual salaries up to CHF 860’400 and often also higher savings contributions are financed compared to the legal minimum benefits. While companies with employees of more than 300 persons usually run company own-pension funds, smaller companies join collective foundations to provide the pension benefits.