Pension and retirement in Switzerland: the 3 pillar system

1st pillar: AVS (Old-age and survivors insurance)

The AVS is the obligatory basis of Swiss insurance. Any person working or residing in Switzerland contributes from the age of 18 (for active people) or 21 (for non-active people). Contributions are shared between the employer and the employee, at a rate of 4.35% each on gross salary (8.7% in total in 2026).

The full AVS pension requires 44 years of uninterrupted contributions. The maximum individual pension amounts to CHF 2,450 per month in 2026, and to CHF 3,675 for a couple. These amounts are not enough to maintain the previous standard of living: this is why the 2nd pillar exists.

For expatriates, each year of missing contributions proportionally reduces the pension. If you leave Switzerland for a country outside the EU/EFTA, you can request reimbursement of your AVS contributions under certain conditions. With an EU/EFTA country, the years of contributions are counted thanks to bilateral agreements.

• • Contribution: 8.7% of gross salary (half employer, half employee)
• • Maximum individual pension: CHF 2,450/month (2026)
• • Maximum couple's pension: CHF 3,675/month
• • Retirement age: 65 (men and women from 2028)
• • Mandatory contribution from age 18 (active) or age 21 (non-active)

2nd pillar: the LPP (occupational pension)

The 2nd pillar is compulsory for all employees whose annual income exceeds the entry threshold of CHF 22,680 (2026). Your employer's pension fund manages your contributions, the amount of which increases with age. The combined objective of the 1st and 2nd pillar is to guarantee approximately 60% of the final salary upon retirement.

Your pension assets are made up of employee and employer contributions, interest and any voluntary redemptions. It can be viewed on your annual pension certificate. If you change employer, your assets are transferred to the new pension fund. In the event of unemployment or departure from Switzerland, it is paid into a vested benefits account.

The LPP redemption is one of the most powerful tax optimization tools in Switzerland: the amount purchased is fully deductible from taxable income. Your pension certificate indicates the available redemption potential.

3rd pillar: individual savings

The 3rd pillar is voluntary and allows you to supplement the benefits of the first two pillars. It exists in two forms: pillar 3a (tied, tax advantageous) and pillar 3b (free, without specific tax advantage). Pillar 3a is particularly attractive for expatriates because the payments are fully deductible from taxable income.

For a detailed overview of pillar 3a, see our dedicated guide which covers the ceilings, tax benefits by canton and optimization strategies.

Comparison of the 3 pillars

The table below summarizes the main characteristics of each pillar of the Swiss pension system.

Leaving Switzerland: what happens to your assets?

The fate of your pension assets depends on your destination. If you go to an EU/EFTA country, the obligatory portion of the 2nd pillar remains blocked in a vested benefits account in Switzerland until retirement age. Only the non-mandatory part can be withdrawn in cash. If you leave Switzerland for a country outside the EU/EFTA, you can withdraw your entire 2nd pillar capital.

The 3rd pillar (3a) can be withdrawn in full upon permanent departure from Switzerland, whatever the destination. The withdrawal is subject to a reduced tax deducted at source. Certain cantons (Schwyz, Appenzell) apply particularly low rates, which encourages certain taxpayers to transfer their vested benefits account to these cantons before withdrawal.

For the AVS, the contributions paid give the right to a future pension proportional to the years contributed. Reimbursement of AVS contributions is only possible for nationals of countries without a social security agreement with Switzerland.

• • Departure to EU/EFTA: mandatory LPP portion blocked, non-mandatory portion withdrawable
• • Departure outside EU/EFTA: full withdrawal of the 2nd pillar possible
• • 3rd pillar: full withdrawal possible (reduced withholding tax)
• • AVS: pension proportional to the years contributed, no reimbursement (except in exceptional circumstances)

Planning your retirement in Switzerland

Serious retirement planning should begin no later than 10 years ahead of schedule. The key points to evaluate are: the number of years of AVS contributions (to aim for the maximum pension), the LPP redemption potential, the choice between pension and capital for the 2nd pillar, and the optimization of withdrawals from the 3rd pillar.

The question of pension vs. capital in the 2nd pillar is crucial. The annuity provides security for life but disappears upon death (or partially to the surviving spouse). Capital offers more flexibility but requires managing your investment yourself. Many policyholders choose a mixed solution.

Hire a certified financial planner for a personalized analysis. The cost of complete retirement planning is between CHF 1,500 and CHF 4,000, an investment largely profitable thanks to the tax optimizations identified.