Understanding the Three Pillars System

When you retire, the pension you receive will be calculated based on the contributions you have made to your pension plans throughout your working life. If you choose to retire earlier or postpone your retirement, your pension amount will be adjusted accordingly. In Switzerland, retirement planning is built on three pillars: OASI, the occupational pension (2^nd pillar), and the third pillar. ​‌

The 1^st pillar: OASI

Under the Swiss Constitution, OASI pensions must cover basic living needs at retirement. However, if you wish to maintain your standard of living, this pension alone may not be sufficient.

Pension amounts

• Minimum pension for a single person: CHF 1,260 per month
• Maximum pension for a single person: CHF 2,520 per month
• Maximum pension for a married couple: CHF 3,780 per month

Factors influencing the amount of your OASI pension ​‌ 

Number of years of OASI contributions

• If you have paid OASI contributions every year, you are entitled to a full pension.
• If you have contribution gaps, you will only receive a partial pension. For example, missing one year of contributions reduces your pension by around 2.3%. 
  
  

Average annual income

• The higher your salary, the higher your OASI contributions, which increases your pension.
• To receive the maximum pension, your average annual income must be at least CHF 90,720 (2025).
  
  

Married couples or registered partnerships

The pension for a married couple or a registered partnership is capped at 150% of the maximum individual pension. Currently, this limit amounts to CHF 3,780 per month. If the sum of your two pensions exceeds this ceiling, your couple’s pension will be adjusted accordingly. ​‌ 

OASI splitting in the event of divorce ​

Divorce has a direct impact on your OASI assets. The division of retirement savings across the three pillars after a separation is governed by law. The full retirement assets accumulated by both spouses are split equally between them. Income splitting applies to all calendar years corresponding to the duration of the marriage. 

OASI pension in the event of early or deferred retirement ​

 In Switzerland, the reference age to receive the OASI pension is 65 for both women and men. However, you now benefit from greater flexibility: you may bring your retirement forward, defer it, or even choose a partial retirement.

Early retirement

You can bring your OASI pension forward by 1 to 2 years. A permanent reduction applies, proportional to the number of years you retire early:

• 1 year early: –6.8% applied to the lifelong pension

• 2 years early: 13.6% applied to the lifelong pension

No child pension is paid during the early‑retirement period. In addition, you are no longer entitled to disability or survivors' benefits when you receive an early OASI pension.

If you decide to retire early, you must notify your compensation office even if you are not engaged in paid employment. If you continue working, you must report it as well; otherwise, you may create contribution gaps, which would reduce your future pension. 

Flexible (partial) retirement

You can choose to advance only part of your old‑age pension or defer part of it. The portion withdrawn early may be set in francs or as a percentage and must range between 20% and 80% of your full old‑age pension.

This option allows you to:

• continue working part‑time;

• receive part of your OASI pension;

• continue paying contributions to avoid gaps.

This solution is often suitable for couples in which one partner continues working, or for those who wish to maintain part of their income.

However, be aware that mixed income (salary + early pension) may result in higher taxation, which sometimes reduces the benefit of early retirement.​‌ 

Deferred retirement

You may defer your OASI pension by 1 to 5 years. In this case, your pension will increase permanently, with the level of increase depending on the deferral period:

• Minimum deferral: 12 months

• Maximum deferral: 60 months

The longer you defer, the higher the increase applied to your pension.​‌ 

Estimating your OASI pension

You can request an estimate of the pension you will receive at retirement at any time. Keep in mind that this estimate is indicative only, as it is based on current legal provisions and your present professional situation.

To obtain an online estimate of your future pension, you can consult the social insurance services.​‌ 

The 2^ndpillar

The pension you receive from the second pillar is calculated based on the contributions paid throughout your professional life and on the rules defined by your pension fund. At retirement, the accumulated amount is generally paid out as a monthly retirement pension.

You may, however, withdraw up to one-quarter of your second‑pillar assets as a lump sum, with the remaining portion paid as a monthly pension. Some pension funds may allow a higher lump-sum withdrawal, or even a full capital withdrawal instead of a pension, depending on their regulations.

Your retirement pension is determined using the conversion rate, which is applied to convert the capital accumulated in your second pillar into an annual pension. The minimum conversion rate for the mandatory portion is set by law and currently stands at 6.8%.

For example, if you have accumulated CHF 600,000 in retirement assets and the conversion rate is 6.8%, your annual pension will amount to CHF 40,800, which corresponds to CHF 3,400 per month.​‌ 

The 3^rd pillar: your individual savings

The third pillar is not mandatory, but it is strongly recommended.

If you contribute to the 3^rd pillar, the total amount of your retirement assets will be higher. On average, the amounts from the 1^st and 2^nd pillars represent around 60% of your final income at retirement. The 3^rd pillar is voluntary and individual; it allows you to secure additional income for your retirement and maintain your standard of living.​‌ 

Pillar 3A

This corresponds to tied individual pension savings dedicated to retirement.

• Tax advantages: Contributions made to Pillar 3a are tax‑deductible up to the legal limits set each year.

• Withdrawals: Withdrawals from Pillar 3a are taxed separately at a favorable rate as lump‑sum pension benefits.

• Contribution ceiling: Employees affiliated with a pension fund may contribute up to CHF 7,258 per year (2025 value). Self‑employed individuals without a pension fund may contribute up to 20% of their income, with a maximum of CHF 36,288 per year.

• Eligibility: Only individuals earning an income subject to OASI contributions may pay into Pillar 3a, as it is linked to OASI affiliation. Wealth alone does not entitle you to contribute to Pillar 3a.

• Buy‑ins (repurchases: Starting in 2026, it will be possible to make buy-ins into Pillar 3a, but only to cover contribution gaps beginning with the year 2025.

  • The first buy-ins may be made in 2026 for the 2025 contribution year. Buy-ins are allowed for up to 10 previous years, but exclusively for years after 2025.

  • To buy back a missing year, you must:

    •  have earned income subject to OASI contributions during both the missing year and the year in which the buy-in is made, and

    •  have already paid the maximum ordinary Pillar 3a contribution for the buy-in year. 

• The buy-in amount is capped at the limit of the “small Pillar 3a contribution” (CHF 7,258 in 2025), in addition to the ordinary annual contribution. This limit also applies to self-employed individuals, even if their contribution gaps exceed this amount.

• A retroactive contribution must be requested in writing from your Pillar 3a provider, whether it is a bank or an insurance company.

• Don’t forget to include this payment in your tax return: like ordinary Pillar 3a contributions, retroactive buy-ins are fully deductible from taxable income. 

Pillar 3B

This corresponds to flexible individual savings that are not tied to retirement.

• Tax advantages: Unlike Pillar 3a, contributions to Pillar 3b are not tax‑deductible, except in certain cantons (such as Geneva and Fribourg). ​‌  

• Withdrawals:  Withdrawals from Pillar 3b are tax‑exempt under certain conditions, such as the age at withdrawal or the duration of the contract.

• Contribution ceiling: Pillar 3b has no annual contribution limit. ​

• Eligibility: Subscription to a Pillar 3b plan is fully open and unrestricted.