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3-pillar system explained

The three pillars in Switzerland provide you with the best pension.

The goal of the three pillars

The Swiss pension system should allow you to maintain your customary standard of living during retirement, unemployment, disability and for surviving dependents in the event of death. Given the demographic trend, individual private provision in the context of the third pillar is becoming increasingly important, so that insured persons are able to in fact maintain their customary standard of living in old age.

An overview of the three pillars

1st pillar

Government pension (AHV / IV / EO):

  • The AHV / IV / EO is mandatory for people resident or working in Switzerland. The AHV / IV pensions should cover the basic necessities during old age, as well as in the event of the death or disability.
  • The amount of the pension depends on the amounts contributed and the contribution period. 

2nd Pillar

Occupational pension (BVG pension fund):

  • The aim of occupational pensions is to ensure that, together with AHV / IV, the elderly can suitably continue their customary living standards, likewise surviving dependents and people with disabilities. 

3rd pillar

Private provision (unrestricted and restricted pensions):

  • Pillar 3a is used for a voluntary personal pension. It allows employed people to build up their own retirement capital or, for instance, to secure later amortisation of a mortgage. This form of savings enjoys extensive tax advantages: The contributions up to the statutory annual maximum amount significantly reduce taxable income.
  • Pillar 3b combines all the assets that are not already fixed in pillars 1, 2 and 3a.