Swiss Pension System
The Swiss pension system is based on three pillars:
1. Pillar: Mandatory State Pension (AHV)
The state pension scheme called AHV (Alters- und Hinterlassenenversicherung, i.e. old-age and survivors' insurance) is mandatory for everyone with gainful employment and residence in Switzerland. It aims at partly compensating the loss of income after retirement or the death of a parent or partner. Based on the idea of solidarity through the generations, AHV is financed through the contributions of the working generation for the retired, orphaned or widowed insured.
Disability is also partly covered by this insurance and partly by the second pillar (occupational pension funds).
Both UZH employees and employer pay half of the contributions. The employee's contribution is directly deducted from his or her salary. UZH pays both the contributions of the employee and the employer to the Swiss Compensation Office.
As a member of the old-age and survivors' insurance, you will receive a Swiss social security number and card. If you haven't worked in Switzerland before, UZH HR will request this in your name and forward it to you.
An overview of the state pension can be found on the website of the Swiss Authorities online.
Detailed information on 1st pillar social insurance can be found on the website of the information center OASI/DI.
2. Pillar: Occupational pension
Together with the first pillar, the occupational pension funds are meant to ensure a certain standard of living after retirement. The two first pillars together should amount to about 60 % of the last salary.
The 2nd pillar of old age insurance is based on individual savings. Contributions to the occupations pension funds (Pensionskasse) are mandatory for persons subject to the AHV and with an annual income of at least CHF 21,150. Savings accumulate until the insured person reaches retirement age. Some pension funds allow for the insured persons to take early retirement during the five years preceding ordinary retirement, which usually involves a reduction of the pension. The employer is obliged to pay at least half of the required contributions. In addition to their regular contributions, employees have the option to pay voluntary contributions which would entitle them to pension and withdrawal benefits. More detailed information on the meaning and objectives of occupational pension funds is given by the Federal Social Insurance Office.
At UZH, employees are insured either with BVK or VSAO. For more information on these pensions funds, please visit the website of HR.
3. Pillar: Private pension
In addition to the state and occupational pension, it is possible to save for one’s retirement by contributing to a private pension plan. This is optional and based on private savings. There are two different private pension plans, the so-called 3a pillar and the 3b pillar.
This is a possibility with certain tax benefits but also restrictions. Anyone who earns an income can pay a set amount into their pension plan with their bank or insurance. Employed people with an occupational plan can pay an amount of CHF 6’768 (2015) and deduct it from their tax. The maximum amount is considerably higher for self-employed persons. However, savings in this pension plan can’t be taken out at any given time.
This is an unrestricted pension plan into which you can pay any amount you like. However, there are fewer tax advantages than with 3a.
For more information on private pension plans, visit the website of Swiss Authorities online.
The ordinary retirement age in Switzerland is 64 for women and 65 for men. At UZH, retirement age is 65 for both men and women. Depending on your position and occupational pension fund, both early or postponed retirement may be possible.
At least three months prior to reaching retirement age, you must send a written request to your compensation office in order to receive AHV payments. Information on the procedure in the Canton of Zurich can be found on the website of the Social Insurance Office of Zurich.