State pension provision, encompassing old-age, survivors' and disability insurance (AHV/IV), constitutes the first pillar and is therefore the foundation of the three-pillar concept in the Swiss pension system. The aim of pillar 1 is to protect pensioners, the disabled and survivors against falling below the poverty line. If the benefits from AHV and IV are not sufficient to secure their livelihood, they also receive supplementary benefits (EL).
As a rule, anyone who moves to a new country of residence and is no longer working in Switzerland ceases to have mandatory insurance. These people will have contribution gaps later on unless they take out additional voluntary insurance.
The first pillar is financed on a pay-as-you-go basis. This means that those in gainful employment and their employers pay in monthly contributions that fund the pensions currently being paid out to retirees. Employees and employers each pay half of the contributions for AHV, IV and EO (loss of earnings compensation). The self-employed and those not in gainful employment have to finance the full contributions themselves. The relevant contributions are calculated as a percentage of one's gross salary.
| AHV | IV | EO | Total | |
|---|---|---|---|---|
| Contribution rate | 8.7 % | 1.4 % | 0.5 % | 10.55 % |
All persons living in Switzerland and in gainful employment are liable for contributions from January 1 after reaching the age of 17. Those who are not in gainful employment or not yet in gainful employment also become liable for contributions from January 1 after reaching the age of 20. Those who continue to be in gainful employment after ordinary pensionable age only pay contributions if their monthly income is higher than CHF 1,400.
In addition, the Confederation and the cantons make a significant contribution to the financing of pillar 1 with value-added tax, as well as tobacco and alcohol tax
If you are about to retire, you should register with the compensation office three to four months before your proposed retirement date so that you can draw your pension. You can obtain the contact address of the responsible compensation office from the AHV/IV information office.
Furthermore, you can also request an individual statement free of charge from your compensation office or AHV/IV information office. From this you can see how high your AHV pension will be and whether any contribution years are missing.
Contribution gaps or missing contribution years in AHV can come about, for instance, due to study, working abroad or temporary unemployment. If you have a contribution gap from the age of 20 up until the time of retirement, this will result in a reduction of your retirement pension. From the time when the contribution gap arises, you have five years in which to make up the missing contributions.
The maximum AHV pension is CHF
2,450
per month. However, you can only draw the maximum AHV pension if you reach an average annual salary of CHF 88,200 during your working life. In addition, men must have paid in for at least 44 contribution years and women for 43 years. The minimum retirement pension from AHV is set at CHF 1,225 a month, but deductions are also made from this minimum AHV pension if someone has contribution gaps.Married persons together may draw no more than one and a half times the maximum AHV pension. However, this limit does not apply to partners.