Pension system in Switzerland. Retirement age in Switzerland in 2021

general information

The Alpine Republic received another title to its treasury. The Swiss pension system was included in the top 10 best pension systems in the world according to the latest Melbourne Mercer Global Pension Index-2017 study.

The Confederation took 8th place when a total of 30 countries among developed countries took part in the ranking.

All pension systems were assessed according to criteria such as proportionality, completeness and sustainability of development.

In addition to government guarantees, experts also assessed the role of private insurance.

At the top, but not like before

The Alpine Republic received another title to its treasury. The Swiss pension system was included in the top 10 best pension systems in the world according to the Melbourne Mercer Global Pension Index-2017 study.

The Confederation took 8th place. In total, 30 developed countries took part in the rating. All pension systems were assessed according to criteria such as proportionality, completeness and sustainability of development. In addition to government guarantees, experts also assessed the role of private insurance.

Due to the downward trend, Switzerland's current position cannot be called winning. In 2021, the Alpine Republic was in 6th place. In 2015 – in 4th place. What is the reason for this trend?

According to the study's authors, the growing life expectancy of the Swiss, combined with a constant retirement age, is leading to an increase in pension payments. This factor negatively affects the sustainable development of the Swiss pension system.

At the top, but not like before

Due to the downward trend, Switzerland's current position cannot be called winning. In 2021, the Alpine Republic was in 6th place. In 2015 – in 4th place. What is the reason for this trend?

Swiss pension system

The Swiss pension system is classified as multi-tier, which allows citizens, if they wish, to increase the amount of payments received after retirement.

The pension insurance system has 3 levels:

The regime established at the state level includes payments for old age, loss of a breadwinner or disability. It is a mandatory state program, the amount of payments for which is tied to length of service and average annual income during employment.
An additional level is required for working pensioners. This program is represented by the funded part of the pension, in which all able-bodied citizens whose annual income exceeds 21,150 francs participate.
Individual. This level of the pension system is completely voluntary and is represented by various private investment funds. Products designed for pensioners are offered by both large insurance companies, banks, and small organizations.

The state bears full responsibility only for providing pensioners with the first level, so that an elderly person is not left without a means of subsistence. In order for the pension amount to suit older people, they themselves must make a choice in which levels of the system to join.

First pension level

The corresponding pension system consists of 3 levels. The first level is the mandatory state system of “Old Age and Survivor Insurance” AHV. The pension in Switzerland under this system is calculated based on length of service and average annual income. At the moment, the minimum pension is 1,175 francs, the maximum is 2,350 francs per month. However, getting the maximum pension is not so easy. This requires a continuous work experience of 45 years for men and 44 years for women. In addition, the average income should be at least 84,600 francs per year - a decent amount even for Swiss salaries. In Switzerland, 28% of working-age men and 13% of women receive the maximum pension. If we are talking about a pension for a married couple, then it is a maximum of 3,525 francs per month, subject to the same conditions regarding length of service and income. Contributions to the pension fund in the amount of 5.125% of wages are paid equally by the employer and employee.

Second pension level

This support has been in effect since 1985 - compulsory insurance of a person for the period of working activity, and is a funded (BVG) part of the pension. The goal is that the benefit amount should be at least 60% of the salary. Transfer 7-18% of income to savings banks chosen by the employer.

Interesting information from BBQcash: When changing jobs, a person transfers his savings independently.

All citizens are required to pay contributions if:

over 17 years old;
annual income is more than 21.3 thousand francs.

Self-employed people, people earning less than the required amount, individual entrepreneurs are not required to pay, only if they wish. For them there is the following - 3 support.

Important from BBQcash: a citizen in old age receives 6.8% from his savings.

This level is added to the previous one, significantly increasing the benefit amount. A person can receive all the savings in full if:

buys a home;
creates a business;
pays off the mortgage;
moves for permanent residence abroad;
receives disability benefits.

In 2021, there have been changes related to the savings of spouses - after a divorce, they are divided in half.

Third pension level

Voluntary level or self-insurance - the principle of operation is similar to other countries. There are two types:

Target - formed from tax deductions. Contributions can reduce the current base - by a maximum of 34.1 thousand francs for individual entrepreneurs, for others - 6.8.
Free - voluntary payments to private funds, banks or insurance companies.

No tax is paid on interest received.

Useful information from BBQcash: transition to official work for the self-employed - it is possible to transfer savings to the previous level.

You can use your savings after reaching a certain age. There are many investment products offered with favorable conditions. Responsibility for funds lies with the foundations, not the state. They are known throughout the world for their reliability. The amount paid depends on the amount of savings.

Pension system structure

The Swiss pension system is classified as multi-tier, which allows citizens, if they wish, to increase the amount of payments received after retirement. It provides for 3 levels, including:

Old age and survivors insurance, abbreviated as AHV. It is a mandatory state program, the amount of payments for which is tied to length of service and average annual income during employment.
Employment insurance, abbreviated BVG. This program is represented by the funded part of the pension, in which all able-bodied citizens whose annual income exceeds 21,150 francs participate.
Individual pension savings. This level of the pension system is completely voluntary and is represented by various private investment funds. Products designed for pensioners are offered by both large insurance companies, banks, and small organizations.

Structure of the Swiss pension system

Each of the above pension levels has different features. However, before looking into them, it is wise to familiarize yourself with the retirement age in Switzerland. This figure is currently 64 years for female citizens and 65 years for male citizens.

Retirement age and life expectancy in different countries

Due to the rapid increase in living standards, the government of this state plans to equalize this indicator at around 65 years for both sexes by 2021. At the same time, some industry associations have repeatedly proposed increasing the retirement threshold to 67 years, however, such an initiative has not found support from the Swiss authorities.

Pension legislation provides that citizens of the country can retire early, but not earlier than 62 years for women and 63 for men. Early retirement is associated with a reduction in the amount that a person will receive in the future as benefits.

Watch a video about the pension system in Switzerland.

First level - AHV

As mentioned earlier, the basis of the Swiss pension system is a mandatory state pension insurance program called AHV.

The main role in calculating the final payments for it is played by the pensioner’s length of service and his annual income. The size of payments under the program ranges from 1200 francs (the minimum possible) to the maximum amount - 2350 francs monthly.

It is quite difficult to receive the maximum payment under this program, since the mandatory requirement for this is a work experience of 45 years for men and 44 years for women.

In addition, there is another condition - the annual income of a citizen applying for the maximum pension should not be less than 84,600 francs annually, which seems to be a large salary even by local standards.

The number of pensioners permanently residing in this small European state is 2.5 million people, among whom only 28% of male citizens and 13% of females receive maximum payments under the AHV program. If the income of a married couple is calculated, it cannot be higher than 3,525 francs per month for both spouses.

The program implies that during work, each citizen pays 5.125% of his salary to the state insurance fund, in half with the employer. This allows you to save the necessary amount of money to receive payments in the future.

Watch the video: Is it possible to increase the basic pension in Switzerland.

Second level - BVG

Since prices in Switzerland are significantly higher than in other European countries, AHV payments seem relatively small for local residents.

In view of this, the population uses the second level of insurance, called labor insurance, abbreviated BVG. It is a funded system, contributions to which are paid by all employed residents whose earnings exceed 21,150 francs annually.

This requirement does not apply to the category of self-employed citizens (IP), who can independently make pension contributions on a voluntary basis. You can find out how to open a business in Switzerland on the website.

Pension wages are usually defined as the portion of wages between 7/8 and three of the maximum current AHV old age pensions in force at the time

When calculating future payments, a coefficient system is used. It provides that the Swiss government annually sets the percentage that a citizen will receive from the total amount of accumulated funds monthly.

At the moment, the interest rate is 6.8%, however, proposals are increasingly heard to reduce it to 6%.

Payments under this program allow a citizen to significantly improve their financial situation after retirement, since they are combined with government payments under AHV.

Among other things, this program provides for the possibility of repaying the entire capital, however, only in certain cases. Among them:

acquisition of real estate;
opening your own business;
the need to pay off a mortgage loan;
moving for permanent residence abroad;
receiving disability benefits.

The main purpose of this part of the pension is to ensure an adequate standard of living for pensioners. The size of these payments in combination with government payments, according to the program, is about 60% of a citizen’s salary during his employment.

Watch a video about how retirees live in Switzerland.

The third level is voluntary

Voluntary pension insurance in Switzerland is very similar to similar systems and funds distributed throughout Europe. As a rule, they are special investment products for pensioners, which have favorable conditions and do not require regular deposits of funds.

Such proposals are most often developed by small private companies, insurance organizations and financial institutions. At the same time, the fund administration, not the state, is responsible for the safety of funds. However, in terms of the reliability of financial companies, Switzerland is generally recognized as one of the international leaders.

Income at this level of the pension system is practically unlimited, since the citizen himself determines the size of the contribution, the type of product, the method and regularity of depositing funds, as well as other important indicators. If you add up the income of three levels at once, you get an amount sufficient for people of retirement age to live comfortably in Switzerland.

Switzerland ranks second in terms of living standards for retirees

It is worth noting that the use of the third (optional) level of the pension system is encouraged by the state. This is manifested, first of all, in tax benefits, which can significantly reduce the costs of a pensioner.

The total income across the three levels reaches an average of 6 thousand francs, which corresponds to the salary of a citizen employed in a managerial position.

Retirement age in Switzerland

The retirement age in Switzerland today is 64 years for women and 65 years for men. By 2021, it is planned to equalize this age to 65 years for everyone. Retirement is possible before reaching this age, but not earlier than 62 for women and 63 for men. In this case, the pension amount will, of course, be smaller. The economic industry association Economiesuisse and the Swiss Employers' Association have proposed a stepwise increase in the retirement age to 67 years. But this idea has not yet found a response either in the parliament or in the Swiss government.

What is the retirement age in Switzerland?

By choosing this level, able-bodied Swiss citizens can retire earlier, but not more than 2 years. At the same time, he will lose 6.8% per year of the required security amount. The average pension in Switzerland, with payments of this level, is calculated depending on the level of the average salary received and can vary in the “corridor” from 1,140 to 2,280 Swiss francs.

The Federal Statistics Service (OFS) has published detailed information on persons who began receiving professional annuities (so-called “columns 2 and 3a”) in 2015.

Ensuring the financial stability of citizens in old age is an important task of the Swiss government. According to the recently published Global Retirement Index, compiled by the large French investment bank Natixis, Switzerland is one of the most comfortable countries for retirees.

All citizens are required to pay contributions if:

over 17 years old;
annual income is more than 21.3 thousand francs.

Pension amount in Switzerland

The amount of the benefit is the sum of payments for all three pillars, which can reach 60-80% of the last earnings. Sometimes it reaches 6,000 francs per month, which is enough to ensure a comfortable life. This amount is most likely the exception rather than the rule—more often people receive less benefits.

Minimum pension in Switzerland

The minimum size is guaranteed by the first column. From 2021, payments of no less than 1185 and no more than 2370 francs per month. In 2021 they were slightly lower (10 and 20). 45 years of experience - 1200 benefits. For spouses, another calculation - 150% of the arithmetic average of their pensions, but not more than 3.5 thousand francs. These are small amounts by Swiss standards.

Average pension in Switzerland

The average amount in 2021 is 4 thousand francs, which is equal to the minimum wage. This is quite a small amount.

Pension in Switzerland in rubles - from 77 to 260 thousand and above.

Important from BBQcash: when prices and average salaries change, benefits are indexed.

There is no special widow's pension or inheritance of spousal benefits. Can apply for survivor's benefits if living in Switzerland.

The financial well-being of the elderly ensures:

developed economy;
state attention to social issues;
reasonable pension system.

Retirement allows citizens to be happy by changing their lives. They travel and spend more time doing their favorite hobbies.

Pension amount in Switzerland in 2019-20.

Minimum pension in Switzerland

Average pension in Switzerland

The average amount in 2021 is 4 thousand francs, which is equal to the minimum wage. This is quite a small amount.

Pension in Switzerland in rubles - from 77 to 260 thousand and above.

Important from BBQcash: when prices and average salaries change, benefits are indexed.

There is no special widow's pension or inheritance of spousal benefits. Can apply for survivor's benefits if living in Switzerland.

The financial well-being of the elderly ensures:

developed economy;
state attention to social issues;
reasonable pension system.

Retirement allows citizens to be happy by changing their lives. They travel and spend more time doing their favorite hobbies.

Capital repayment

In certain cases, BVG pension capital in Switzerland can be paid out in full at once. This is possible in the case of purchasing real estate, to pay off a mortgage loan, in case of starting your own business, when leaving Switzerland for permanent residence abroad, as well as when receiving a disability pension. At the same time, the main task of the second level of pension, together with the first, is to provide income for those who have retired at least at the level of 60% of their previous salary.

Pension size in Switzerland in 2021

Theoretically, by taking advantage of the opportunities provided by the three pillars of the Swiss pension system, you can receive a pension of 6,000 francs per month. But this is an exception. Many Swiss pensioners have lower incomes.

The total amount of pension received from all three pillars of the pension system is sufficient for comfortable living in Switzerland.

Minimum size

In Switzerland, the receipt of a minimum pension is guaranteed by the functioning of the first column of the AHV. If a pensioner has 45 years of experience, then he is paid about 1,200 francs per month, which corresponds to 77,000 rubles. This amount is very small by Swiss standards. A pensioner can increase his well-being by being participants in the second and third columns.

Switzerland has a system that is popularly nicknamed “marriage punishment.” For a married couple, the pension is determined according to a special procedure:

individual pensions calculated for each spouse are summed up;
the arithmetic average of two individual pensions is calculated;
is determined by 150% of the couple’s arithmetic average pension, which will be its total pension income, which cannot be higher than 3,525 francs for both spouses.

The average size

Pensions paid under the first column are increased to a sufficient level by payments under the BVG column. In total, the overall average pension in Switzerland can be 60-80% of the last salary before retirement.

The average pension in Switzerland in 2021 is 4,000 francs per month (25,500 rubles). This amount corresponds to the actual minimum wage, which is considered low in the state.

In Switzerland, there are no benefits for pensioners. Expenses related to medical care, utility bills, and transportation costs are paid by elderly Swiss in full.

Benefits for pensioners

The average level of pension provided is so high that the question of providing benefits for anything automatically disappears. Benefits for pensioners in Switzerland are not provided even for transport or utility bills. All expenses regarding travel, flights, medicine, etc. are subject to 100% payment for both the working class and pensioners.

In conclusion, I would like to note once again that by creating a multi-level pension formation system, Switzerland has chosen the very right path. Citizens of retirement age and other socially protected segments of the country's population always have decent support, both from a financial and health point of view.

How do pensioners live in Switzerland?

If we look at the statistical data, we can note that a fifth of the population of this country is at retirement age. Accordingly, the persons reached 64 and 65 years of age. Due to the fact that the population growth rate is small and the number of able-bodied people has decreased, a crisis has occurred in the pension system. A high level of quality of life and medical services provided; by the age of 65, citizens are in good physical shape.

The country experienced a surge in birth rates in the 1960s, which will lead to an increase in the number of elderly people by 2030. Currently, the allocated funds are not enough to meet the needs of pensioners. To meet the requirements of this category of citizens, the state needs to build about 100 houses intended for the elderly.

The situation can also be improved by increasing the number of services provided at home. The level of medicine in Switzerland is at a high level, psychologists work with these individuals, it is possible to attend clubs and group classes. For example, these are walking, traveling in groups, etc.

This group of citizens has the opportunity to use discounts on the purchase of plane tickets, which affects active recreation. Vegetable gardening and horticulture are considered only as a hobby.

How much do Swiss pensioners earn?

In theory, if a citizen takes advantage of the opportunities listed by the three elements of the pension system, he will be able to receive pension payments in the amount of about 6 thousand francs. This value is set for a monthly period. However, this example is an exception. This is due to the fact that the majority of Swiss residents have a lower level of income.

On average, residents of this country receive about 3.5 - 4 thousand francs per month.

Retirement age in Switzerland in 2021

For such an expensive country as Switzerland, even the maximum pension of 2,350 francs is a very modest amount. For this reason, there is a second level of the pension system - BVG labor insurance. This is nothing more than a funded pension. All workers who earn at least 21,150 francs per year pay the corresponding contributions.

In 2021, it was proposed to increase payments from the state by 10%. This is a rather controversial proposal - the population voted against it in the referendum. This level is also compulsory for contributions by the working class of citizens with an annual salary level not exceeding CHF 19,890. Self-employed persons are exempt from this level of formation, but can make contributions at their own request.

About the Swiss pension insurance system

The country's pension system is divided into levels:

The regime established at the state level includes payments for old age, loss of a breadwinner or disability. As soon as a citizen turns 20 years old, the state insures him, and from that time on he is obliged to pay insurance premiums from his income. This level applies to all people reaching retirement age who live and work in the country’s economy and is intended to provide a minimum subsistence level.
An additional level is required for working pensioners. The working population of retirement age, receiving a pension, continues to contribute money to the Pension Fund. The main goal of the 2nd regime is to ensure a decent standard of living, close to that of working age.
Individual. Includes personalized diagrams. They are available to working citizens, but are not required for everyone. People who intend to significantly increase the size of their pension benefits in the future open a special bank account and transfer money to it. The account is blocked until reaching retirement age. If the client expresses a desire, the bank can invest these investments in bonds or stocks. In any case, this money does not lie dead weight, and by the time you reach retirement age, the amount can be impressive. The government encourages people to make such savings and therefore provides special tax benefits for them.

The state does not provide any benefits for pensioners, but the size of their pension is so high that they are able to pay for their own medical care, travel expenses, and flights.

Retired Swiss people can afford to live for their own pleasure: travel, make large purchases, in general, do not deny themselves anything. Citizens of the country ensure themselves a calm and prosperous old age throughout their working lives.

Swiss pension for foreigners

Foreigners living in Switzerland can receive a pension if they have dual citizenship. The second country must belong to the European Union or have a pension agreement.

Russian citizens cannot receive a pension here or take into account their work experience in this country, because... there is no signed agreement. You can apply for Russian benefits if you have paid contributions to the Pension Fund. The registration is handled by the department working with the population living abroad. Payments are transferred in rubles to an account opened in a selected financial institution in Russia. Every year you need to confirm that you are not dead.

How do foreigners receive a pension?

To receive a basic level of old-age benefits in Switzerland, you must not only have dual citizenship, but also be a citizen of the European Union, or a country that has a social security agreement with Switzerland. There are no other options for pension payments for foreigners.

Can citizens of the Russian Federation receive a pension?

If a citizen, before immigrating to Switzerland, paid pension contributions on the territory of the Russian Federation for several years, he is probably interested in the possibility of receiving appropriate payments, even while abroad.

A similar feature is provided for by Russian legislation, however, several features should be taken into account:

payments are made only in domestic currency;
Receipt of funds is possible only to an account in one of the financial organizations of the Russian Federation at the client’s choice;
Every year the pensioner must confirm the fact that he is alive.

To apply for a pension and clarify the conditions, a citizen will need to contact the Russian Pension Fund, the Department for Providing for Persons Living Abroad. Confirmation of being alive is carried out by visiting the Russian consulate in Switzerland. In this case, you will need to present a citizen's passport.

Summing up

Sources

https://1migration.ru/switzerland/v-chem-osobennost-pensionnoj-sistemy.html
https://business-swiss.ch/e-konomika-shvejtsarii/pensionnaya-sistema-shvejtsarii/
https://my-swiss.ru/culture/pensiya-v-shvejcarii.html
https://bbqcash.com/aid-and-benefits/retirement-in-switzerland
https://pensiya-lgoty.ru/pensionnaya-sistema-v-shvejcarii/
https://pfrp.ru/faq/pensiya-v-shvejtsarii.html
https://opensii.info/pensionnyy-vozrast/v-shveycarii/
https://SwitzerlandLife.ru/pensiya-v-shvejcarii/