Swiss planning is based on a three-pillar system providing state, occupational, and private pensions as provision for old age. The state swiss pensions plan together with professional retirement planning as provided by employers are grouped together in the first two pillars. The third pillar is a purely private form of pension provision.
Pillar 1 State pension to safeguard a minimum level of subsistence in old age
Pillar 1 comprises old-age and survivors' insurance, disability insurance, and supplementary benefits. As a compulsory state pension scheme, its purpose is to safeguard a minimum level of subsistence in old age and in the event of disability. Pillar 1 insurance is compulsory and extends to all those who live or work in Switzerland.
Pillar 2 Occupational retirement planning to supplement the state pension
Pillar 2 is formed on the basis of the Federal Act on Occupational Retirement, Survivors' and Disability Plans in conjunction with the Federal Law on Accident Insurance. Its aim is to safeguard the funding of living expenses in old age. Pillar 2 insurance is compulsory for all employees with an income of more than CHF 21,150 p.a.
Pillar 3: Private pension provision to make up any shortfalls in protection
Pillar 3 serves to make up any shortfalls in a cover that may arise despite optimum use of Pillars 2 and 3. As a voluntary, supplementary form of insurance, its aim is to allow retirees to maintain their accustomed standard of living, as the benefits payable from Pillars 1 and 2 are not normally sufficient to allow this. The Pillar 3 provision is divided into restricted and flexible pension plans.