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Tax system

Pension system

The Swiss have a three-pillar pension system, which is designed to protect them from the consequences of disability, death and retirement.

The three pillars

The Swiss have a three-pillar pension system. It aims to guarantee the insured or their dependants the standard of living to which they are accustomed in the event of retirement, disability or death (article 111 of the Federal Constitution).

Pillar 1
Guarantees
subsistence
State

pension Pillar 2
Maintains living standard Occupational pension

Pillar 3
Personal
top-up Individual pension

Pillar 1
The first pillar of the Swiss pension system consists of Federal Old Age and Survivors' Insurance (AVS/AHV) and Federal Disability Insurance (AI/IV). Together with any additional benefits, they guarantee subsistence.

Pillar 2
The second pillar consists of Occupational Retirement, Survivors'And Disability Pension Plans (BVG/LPP). Together, the first two pillars must cover at least 60% of the insured person's last salary, thus allowing him/her to enjoy the same standard of living as before. The first pillar is obligatory for everyone. The second pillar is only obligatory for employed persons.

Pillar 3
The third pillar provides individual pension cover, and is optional. Unlike traditional savings methods, it benefits from certain tax advantages. This pillar allows the insured to cover any gaps in their pensions in a targeted manner.

"Pillar 3 A" pensions enable you to pay less tax while guaranteeing your financial future.

Thanks to Pillar 3 Personal Retirement and Savings Products, you can meet your needs in the way that suits you best. You decide the date and the amount of your payments-up to the legal maximum. You can deduct your contributions from your taxable income. Moreover, you will be taxed at a preferential rate, and you will not be charged withholding tax.

Conditions
You may take out a Pillar 3 personal retirement and savings plan if you earn a salary subject to AVS/AHV.

Conditions for withdrawing assets from Pillar 3 account
Pillar 3 assets are blocked and the insured may only withdraw them in the following circumstances :