In Switzerland, the term AVS is the abbreviated form of the French Assurance-vieillesse et survivants. The English form is Old Age and Survivors Insurance (OASI). The German form is Alters- und Hinterlassenenversicherung (AHV).
This state-backed social security insurance provides a basic pension to policyholders once they reach legal retirement age. The pension paid out is based on the amount paid in premiums over the individual’s working life.
All residents of Switzerland are required to participate in the OASI scheme, and in the case of employed individuals, premiums are withheld from salaries by employers. Premiums are charged as a percentage of income. Income in excess of a certain threshold is not subject to OASI contributions.
The OASI is sometimes referred to as the pillar 1a because it is a basic old age pension fund which is available to all residents, as opposed the pillar 2a (occupational pension funds) which is only available to employed individuals and the pillar 3a (private retirement savings) which is only available to employed or self-employed individuals.
More on this topic:
Swiss 3a retirement account comparison
Swiss social security forum
