Saving for your retirement in Switzerland is done via a 3 Pillar system. 3 Saule in German. The first pillar is the social security or AHV which is deducted by your employer from your salary. Your employer also pays in the same amount as you do. The second pillar is the occupational pension scheme provided by your employer. The third pillar is your own provision to top up your pension, and to reduce your income tax burden.
Pillar 1
AHV deductions are automatically made from your wages from age 18 and older. The employer matches the deductions one to one. in 2025 the deduction rate is 5.3% for the employee and 5.3% for the employer.
If you are self-employed then there is a minimum contribution required of CHF 530 per year. There is a sliding scale of contribution rates for self-employed people which is applicable for all earnings from Fr 2500 per year. This can be accessed over the Government site ( in German, French and Italian). https://www.ahv-iv.ch/
If you are not employed in any way, and also not receiving unemployment allowance, then there is also a minimum contribution per year of CHF 530, however this is not due if your spouse earns enough to cover CHF 1060 of contributions per year.
In order to plug a contribution gap, due to not being in the Swiss System all your working life, then you can also pay in extra contributions. This needs to be arranged with the social security office and must commence soon after you arrive in Switzerland. These contributions are tax deductible.
The current minimum monthly pension you can expect to receive upon reaching the retirement age of 65 depends on the number of years you have contributed. If you have at least 44 years contributions then it is CHF 1260 with a maximum of CHF 2520. A married couple cannot receive more than 150% of the maximum pension of a single person. This is one of the so called marriage penalties in Switzerland.
If you leave Switzerland after retirement, then in most cases your pension will be paid to you abroad. However there are some countries with no reciprocal arrangements. In this case you need to apply for a refund of the contributions made by you and your employer. There is no interest added. See this page for more info.
Pillar 2- occupational pension
Your employer is obliged to put you in a company scheme if you earn more than CHF 22’680 per year with that employer. The schemes vary quite a lot and you need to ask your employer or prospective employer for the details. This will include how much you will be contributing, as well as how much your employer contributes, what happens if you become too ill to work, what happens if you die before retirement etc. Most private schemes allow you to access part of the capital early if you wish to buy a property in Switzerland, and allow you to retire earlier than 65 taking all or part of the capital at retirement. What to do with your pension pot on retirement is a whole topic in itself, and you should take professional advice as well as start thinking about the options well in advance of retirement. All payments in to a company scheme are tax deductible, and you are also permitted to make voluntary contributions which are also tax deductible. The pension provider will calculate the maximum contribution you can make each year. If you are working for a company that runs its own pension plan, ensure that they have enough coverage and that it is professionally managed.
When you leave an employer for a new one, you are obliged to transfer your pension funds to the scheme run by your new employer. If you are going to be unemployed then the money is transferred into a vested benefits account until you retire, or transfer it to a new employer. Note that a vested benefits account is automatically only a lump sum. You will need to find an investment if you wish a monthly income from it after retirement. If you wish to become self employed then most pension funds allow you to withdraw some of the funds in order to start your business. As a self employed person you are also permitted to pay up to 20% of your income into a Pillar 3a up to a maximum of CHF 36’288 and this is all tax deductible. It may also be that even as a self employed person you can join in a pillar 2 scheme via your professional organisation if they have one, or if you have employees, by joining them.
Pillar 3 – your own pension savings.
If you wish to open a Pillar 3 account, then you are free to do this with whoever you want, be it through a bank or an insurance company. The Pillar 3a contributions are tax deductible up to a total of CHF 7’258 per year. You can also open 2 or 3 Pillar 3 funds with the same or different organisations and spread your contributions, which allows you to withdraw the fund in different tax years leading up to your retirement. This is more tax efficient as the lump sums from pensions are taxable on withdrawal, and usually on a sliding scale depending on canton. Check the small print that you are not committing to a set amount every year in order to remain flexible in the future, especially if you are an expat- see below.
The 3B scheme is only offered by insurance companies, and will have a contractual duration. It allows you to build up savings in a more flexible form, while providing some life insurance. Pillar 3B contributions are not tax deductible except if you live in Geneva or Fribourg, where you can deduct part of your investment in 3B .
Note to those who are living in Switzerland on a short to medium term basis:
While Pillar 3a offers attractive tax deductions, it’s best suited for long-term residents. Why?
- Restricted access: Funds are locked until retirement age (or early only in specific cases like buying a home in Switzerland, becoming self-employed, or leaving the country permanently).
- Exit tax: If you cash it out when leaving Switzerland, you may pay withholding tax—rates vary by canton and may be partially refundable depending on your destination country’s tax treaty.
Tip: Only contribute to Pillar 3a if you’re confident you’ll be in Switzerland long enough to benefit from the tax savings and won’t need the money in the short term. See my blog on saving and investments for other ideas if you do not contribute to Pillar 3a.
Do you contribute to a Pension plan in another country, or have a paid up plan outside Switzerland?
If so, premiums might be tax deductible here in Switzerland, and the capital value will need declaring on your tax return. How you declare it depends on what sort of plan it is. Contact me if you need more advice on this.