In Switzerland, provision for retirement is based on three pillars: Old Age and Survivors’ Insurance (OASI), Occupational Old-Age, Survivors’ and Disability Benefit Plans (LOB) (referred to colloquially as the “pension funds”), and voluntary private pension provision (3rd pillar). The benefits provided by these three pillars are the main factors in determining the funds available to you in retirement. That’s why it’s worthwhile knowing where you have to pay which contributions and where have you the option of doing so. This three-part series contains the key facts.
Everyone living in Switzerland – and that includes cross-border commuters who work here – has to pay OASI contributions. The OASI pension is financed through contributions to OASI that comprise employee salary deductions which are matched by the employer. As a general rule, a full OASI pension is granted to anyone who pays contributions without interruption from age 20 until ordinary retirement age. If any years of contributions are missing, the pension is reduced. For this reason, it is especially important for students and those who are not gainfully employed to register with the OASI compensation fund as early as possible and to start paying the minimum annual contribution. Missing years of contributions can be paid retrospectively, but only up to five years later.