As an employee in Switzerland, you are generally entitled to an occupational pension fund. This guide answers the most important questions about Swiss pension funds.
What is a pension fund?
A Swiss occupational pension fund is a retirement foundation that helps employees to save for retirement and provide for dependents. The pension fund collects money from you and your employer while you are working (the accumulation phase) and then pays out money to you in the form of a pension after you retire (the distribution phase). The purpose of a pension fund is to ensure that you are provided for during retirement, and if you become disabled. It also helps to provide for your dependents if you pass away.
There are around 1300 different pension funds in Switzerland. Some of these offer more than one pension plan. Each company decides which pension fund and specific plan or plans it wants to use for its employees.
Am I entitled to a pension fund?
If you are employed by a Swiss employer, your employer must enroll you in their pension fund if you meet these criteria:
If you meet the minimum salary requirement, your employer must enroll you in their pension fund from the start of the calendar year that follows your seventeenth birthday. However, until the start of the calendar that follows your twenty-fourth birthday, you will only be entitled to disability pension and survivor’s pensions. After that, you begin accumulating benefits towards your old-age pension as well.
The decision about which occupational pension fund and pension plan to use rests with your employer. However, employers have the option of letting employees choose between up to three different pension plans with different features.
Is an occupational pension fund the same as a Swiss government pension?
No. An occupational pension fund is not the same thing as the OASI that is compulsory for all of Switzerland’s residents.
The OASI provides you with basic old-age and survivor’s pensions whether or not you are employed. The OASI falls under the first pillar of the Swiss providence scheme (social security).
An occupational pension fund, on the other hand, is directly linked to your employment. It falls under the second pillar of the Swiss providence scheme (occupational benefits).
Together with the third pillar of the Swiss providence scheme (private providence through the pillar 3a and pillar 3b), your pensions from the OASI and your occupational pension fund are meant to provide you with sufficient money to fund your retirement.
Which kinds of pensions do occupational pension funds provide?
Swiss occupational pension funds provide four kinds of pensions. These are:
Obligatory or extra-obligatory?
There are certain, basic requirements that apply to all occupational pension funds and are required by Swiss law. These requirements, as well as the contributions, benefits, and pensions that result from them, are generally referred to as the obligatory or compulsory pension fund.
However, the law also allows for many optional features. Each pension fund can choose whether or not it wants to implement these as contractual obligations. Contributions, benefits, and pensions that result from these optional features are referred to as the extra-obligatory or non-compulsory pension fund.
The rules explained in this guide are primarily the compulsory rules that apply to all Swiss occupational pension funds. However, each pension fund is free to offer extra-obligatory features in addition to these minimum compulsory requirements, and many do.
1. The accumulation phase
The accumulation phase is the period during which you pay money into your pension fund. With Swiss occupational pension funds, the accumulation phase for a standard old-age pension begins at the start of the calendar year that follows your twenty-fourth birthday, and ends when you turn 65 years old. Here, moneyland.ch answers important questions about the accumulation phase.
What happens to the money I pay into my pension fund?
The money that you and your employer contribute to your pension fund is credited to your personal pension fund benefits. This is much like a bank account balance, because your benefits will not normally be lower than the total amount you pay in, and you earn interest.
How much do I have to pay into my pension fund?
You and your employer are legally required to pay contributions based on your coordinated salary – the portion of your annual salary that falls between 26,460 francs and 90,720 francs (as per 2025). Which percentage of your coordinated salary you are required to pay into your pension fund depends on your age.
Additionally, you and your employer also have to pay a contribution towards your disability pension and survivor’s pensions. This contribution for risk insurance, and it does not count towards your pension fund benefits. The risk contribution varies between pension funds and individual pension plans, and can also change over time. Pension funds also charge a contribution towards administrative costs, and this fee also varies. You can find the exact amount you pay towards both of these contributions on your annual pension fund statements.
Up to half of each contribution is deducted from your salary, and the other half is paid separately by your employer in addition to your salary. Employers may choose to cover all or part of your half as an extra-obligatory benefit.
Example: If you are 40 years old and earn 80,000 francs per year, then the total annual contribution towards your pension fund benefits will be 5354 francs (10 percent of the portion of your salary that exceeds 26460 francs). The variable contributions for risk insurance and administration come on top of that.
Can I make extra payments into my pension fund?
The contributions shown above are the minimum compulsory payments required by law. However, Swiss occupational pension funds are free to use extra-obligatory contributions that are higher than the minimum, compulsory ones. For example:
The part of pension fund benefits that is made up of compulsory contributions based on your coordinated salary is sometimes referred to as the Pillar 2a, while the portion made up of non-compulsory contractual contributions is sometimes referred to as the pillar 2b.
A few occupational pension funds offer 1e plans. These plans are interesting if your salary exceeds a certain threshold (136,080 francs per year, as per 2025). Pension funds can choose to segregate the contributions you pay on the part of your salary that exceeds the threshold, and give you a say in how the resulting benefits are invested. The ability to choose how to invest your assets sets 1e plans apart from the rest of your benefits, which are managed solely by the pension fund without your involvement. You can find more information in the guide to executive pension plans.
Closing gaps in your pension fund
The Swiss providence scheme is calculated so that the pensions you get from your occupational pension pension fund and the OASI should together cover around 60 percent of the income you earn just before you retire. But that is only true if you have both lived in Switzerland your entire adult life, and do not have any gaps in your occupational pension fund.
Examples of common situations that can cause gaps in your pension fund benefits:
All of these situations can result in a discrepancy between your pension fund benefits and your current income. The result is a gap in your pension fund which must be filled by making additional, voluntary contributions if you want your old-age pension to reflect your actual income.
You can easily find out whether you have a gap in your pension fund by looking at your last annual pension fund statement. If you have a gap, it will be shown in a field titled “Maximum voluntary buy-in to your pension fund” or something similar. The amount shown in this field is the amount that you can pay into your pension fund on a voluntary basis to close the gap so that your future pension accurately reflects your pre-retirement income.
You can make one or multiple voluntary payments towards reducing the size of the gap. It is up to you how much you pay in, as long as the amount is lower than the maximum buy-in shown on your pension fund statement. Your pension fund’s bank account information for voluntary buy-ins may be shown on your pension fund statement, on the pension fund’s website, or on your pension plan’s terms and conditions. If it is not, simply contact your pension fund and ask them to send you the IBAN and other necessary information.
If you make early withdrawals to finance a home, the withdrawn amounts must be repaid in full before you can make voluntary payments to close gaps in your benefits.
How much interest do I earn on my pension fund benefits?
The Swiss federal government sets a minimum annual interest rate that occupational pension funds have to pay. However, this minimum rate only applies to the portion of your pension fund benefits that results from your compulsory pension fund contributions. Currently, the minimum interest rate is 1.25 percent (as per April 2025).
Each pension fund can choose its own interest rate for benefits that result from extra-obligatory contributions. That includes both ongoing contributions paid by employees and employers that exceed the required minimum, and voluntary payments you make to close gaps in your pension fund.
Some pension funds use a single interest rate for both compulsory and voluntary benefits. The interest rate used across the board is an average of the interest rates for the compulsory and voluntary portion. In this case, it is possible that the average rate used can be lower than the minimum required interest rate for compulsory benefits.
Interest rates vary broadly between pension funds. Which pension fund your employer uses can have a substantial impact on how quickly your benefits accumulate, and subsequently on the size of your pension.
How does contributing to a pension fund affect my taxes?
Contributions you pay into your occupational pension fund can be deducted from your taxable income. This applies to both the basic, obligatory contributions that apply to all pension funds, and to non-obligatory contributions that are contractually required by your pension fund.
Voluntary contributions that you make to close gaps in your pension fund benefits are also tax deductible. However, this tax benefit only applies if you do not withdraw your benefits within three years of making the voluntary contribution. If you withdraw your benefits before the three-year term expires, the tax deduction will be annulled in arrears.
What happens if I have more than one employer?
If you work part-time for more than one Swiss employer, then one of the following will apply:
What happens to my pension fund when I change employers?
If you work for just one employer fulltime and you change employers, your former employer must disenroll you from their occupational pension fund, and your new employer must enroll you in their pension fund. You must instruct your former employer’s pension fund to transfer your benefits to your new employer’s pension fund.
Should you fail to provide your former pension fund with the necessary information, they will normally contact you and ask whether the money should be transferred to a new pension fund or to a vested benefits foundation.
If your pension fund fails to obtain the necessary information within six months after you leave your employer, your benefits will generally be transferred to the 2nd Pillar Central Office.
What would happen to my pension fund if I became unemployed?
If you stop working for Swiss employers, you have two choices:
If you are 58 years old or older when you become unemployed, you will remain enrolled in your former employer’s occupational pension fund. You are not required to continue paying contributions after you become unemployed, though you can make voluntary contributions to increase your pension benefits if you choose to. When you reach retirement age, you can receive a lifelong pension based on your existing benefits.
When can I withdraw my pension fund benefits early?
There are situations in which you can withdraw your Swiss pension fund benefits before you reach retirement age. The most relevant are:
What happens to my pension fund when I leave Switzerland?
If you are temporarily sent to another country by your employer, you can remain enrolled in your employer’s pension fund during your stay abroad, within certain limits.
When you move to another country without being sent abroad by a Swiss employer, then your options vary depending on which country you move to:
A Swiss withholding tax applies when you withdraw your benefits. You can find detailed information in the financial guide to leaving Switzerland.
Regardless of which country you move to, you also have the option of leaving your Swiss pension fund benefits in vested benefits foundations in Switzerland until you reach the age of 65, at the latest.
Who will inherit my pension fund benefits if I die before I retire?
If you are enrolled in a Swiss occupational pension fund at the time of your death, your pension fund is required by law to pay out survivor’s pensions to your eligible dependents.
Pension funds are not legally required to pay out your benefits to your heirs. Unless your pension fund’s terms and conditions specifically include this option, your benefits will simply be absorbed into the foundation and used to finance other people’s pensions.
However, many occupational pension funds do allow for your assets to be paid out to heirs in some cases. Swiss occupational pension funds can choose to include clauses in their terms and conditions that allow for all or part of your benefits to be paid out to someone who does not qualify for a widow’s, widower’s, or orphan’s pension. There are clear laws governing who is eligible:
In the absence of a person whom you lived with for at least five years leading up to your death, or a person with whom you have dependent children, these people can receive all or part of your benefits, if the pension fund’s terms and conditions allows for it:
If you have no living parents or siblings, then the pension fund can pay out all or part of your benefits to your remaining legal heirs, as per Swiss inheritance laws. However, this only applies if your pension fund allows for this in its terms and conditions.
With the exception of your remaining legal heirs, pension funds can also choose to pay out survivor’s pensions instead of paying out a lump sum.
What would happen to my benefits if my pension fund became insolvent?
If your employer’s pension fund were to become insolvent, it would be required by law to take steps to restructure. The pension fund can put limitations in place for the duration of the restructuring process, such as reducing the interest rate, and not allowing early withdrawals (for financing a home, for example). The pension fund can also require you to pay additional contributions.
In the worst-case scenario that your pension fund goes bankrupt, your benefits are guaranteed by the LOB Guarantee Fund. This pension fund participant protection scheme covers the compulsory portion of benefits. It also covers non-compulsory benefits that result from contributions that are contractually required by your pension plan. However, the guarantee is limited to contributions paid on the portion of your salary that falls below 136,080 francs (as per 2025). That means benefits in 1e plans are not guaranteed by the fund.
How does marriage and divorce affect my pension fund?
During a divorce, the occupational pension fund benefits that both partners have accumulated during the marriage are pooled and then divided in half. If you have accumulated more benefits than your partner during the marriage, then part of your benefits will go to your ex-spouse. If your partner accumulated more benefits than you over the same period, then you will receive part of their benefits.
Example: Two people are married for a period of 10 years. During that time, Partner A accumulates 100,000 francs of benefits, and Partner B accumulates 50,000 francs of benefits. During the divorce, the benefits of both partners are calculated together, for a total of 150,000 francs. That amount is then divided by two, resulting in an amount of 75,000 francs for each partner. In this case, 25,000 francs of benefits are transferred from Partner A’s pension fund to Partner B’s pension fund.
2. The distribution phase
The distribution phase is the period during which the pension fund pays out an ongoing pension to you. With Swiss occupational pension funds, the distribution phase for a standard old-age pension begins when you turn 65 years old, and ends at your death. Below, moneyland.ch answers important questions about the distribution phase.
How high will my old-age pension be?
The size of your old-age pension is always based on a percentage of your pension fund benefits. That means the more benefits you accumulate, the higher your pension will be.
The conversion rate for the obligatory part of your old-age pension is 6.8 percent, if you wait until the standard retirement age (65) to retire. That means the annual pension you receive will be equal to 6.8 percent of your pension fund benefits.
Example: If, by the time you reach the age of 65, you have accumulated 200,000 francs of pension fund benefits, then you will receive an old-age pension of 13,600 francs per year (1133 francs per month). You will continue receiving this old-age pension until you die.
If you have closed all gaps in your pension fund benefits, the lowest possible full old-age pension you could receive if you retire at standard retirement age is 1546 francs per year, and the highest possible pension is 25,672 francs per year (as per 2025). However, these figures only apply to the compulsory pension, and do not account for pension plans that have non-compulsory benefits.
You can find an estimate of how high your old-age pension will be, based on your current salary and existing benefits, on your last annual pension fund statement.
Important: The 6.8-percent conversion rate only applies to obligatory part of your pension fund benefits. Each pension fund can choose its own conversion rate for benefits that result from extra-obligatory contributions. Some pension plans use a single conversion rate that is an average of the compulsory conversion rate for the obligatory portion and the pension fund's own conversion rate for extra-obligatory benefits. Depending on how high the rate for extra-obligatory benefits is, and how much extra-obligatory benefits you have accumulated, this average conversion rate can be higher or lower than the standard rate for compulsory benefits.
At which age can I start receiving an old-age pension?
The standard retirement age for Swiss occupational pension funds is 65 years old. If you retire at that age, you will receive a full old-age pension based on the standard conversion rate of 6.8 percent.
Can I retire early?
Pension funds are legally required to offer early retirement from the age of 63. But pension funds are free to offer earlier retirement if they choose to. Some Swiss pension funds let you begin receiving your old-age pension as early as age 58.
The conversion rate used is lowered by a certain percentage for every additional year of early retirement. That means the younger you are when you retire, the smaller your old-age pension will be.
Can I retire late?
If you continue working after retirement, you can delay your pension for as long as you continue working, but at the most up until you turn 70 years old.
The conversion rate used to calculate your pension will go up for every year that you postpone your retirement. The longer you delay retirement, the higher your pension will be.
Pension funds are not required to let you keep paying in contributions during this time. However, a pension fund can choose to allow for continued contributions in its terms and conditions. This can be beneficial because it enables you to accumulate more pension fund benefits.
What is partial retirement?
You can choose to begin receiving only a partial pension for up to three years before you reach standard retirement age. This could be beneficial if, for example, you want to reduce your working hours gradually rather than retiring early all at once.
Pension funds can offer partial retirement for longer than three years in their terms and conditions, but they are not required to do so.
As with full early retirement, receiving a partial pension before you reach standard retirement age results in a reduction in your lifelong pension. However, the reductions are smaller compared to full early retirement.
Can I receive more than one pension?
Yes. If you are enrolled in more than one pension fund when you reach retirement age due to working for more than one employer, you must claim separate pensions from each of your pension funds.
Can I choose to withdraw my pension fund benefits instead of receiving a pension?
Regardless of which Swiss occupational pension fund your employer uses, you can withdraw one quarter of your pension fund benefits as a lump sum when you reach retirement age. This can only be done once.
Pension funds can give the option of receiving a one-time payment as a lump sum in place of an old-age pension, disability pension, widow’s pension, widower’s pension, or orphan’s pension. However, they are not required to offer these options.
You can find out if your pension fund lets you choose between receiving a lifelong pension or withdrawing all or part of your benefits as a lump sum by reading the terms and conditions of your pension plan. If this option is available, it is important to carefully calculate whether or not it makes sense for your situation. You can find useful information in the guide to pensions versus lump-sum withdrawals.
How high will my disability pension be?
The pension fund calculates how high your benefits would have been by standard retirement age had you not become disabled, based on your coordinated salary. It then uses that hypothetical amount as the basis for your disability pension. As with your old-age pension, the conversion rate for the compulsory portion of your benefits is 6.8 percent (as per 2025).
Example 1: You become fully disabled because of an illness. Based on your salary at the time, you would hypothetically have accumulated 200,000 francs of benefits by standard retirement age. Assuming you only pay the compulsory pension fund contributions, your annual disability pension would be 13,600 francs per year (6.8 percent of 200,000 francs), or 1133 francs per month.
It is important to note that you only pay pension fund contributions on your coordinated salary. If your salary is higher than the maximum coordinated salary (90,720 francs as per 2025), then your disability pension will not adequately cover your income. Some Swiss occupational pension funds have supplemental disability insurance that covers the difference between the compulsory disability pension and your actual income.
Whether you receive a full disability pension or only a partial pension depends on how severe your disability is. You can find more information in the guide to Swiss disability pensions.
Estimates of how high your disability pension would be based on your current insured salary are shown on your annual pension fund statement.
How much money would my dependents receive if I died?
You can find detailed information about the survivor’s pensions that your spouse and/or dependent children would receive from your pension fund if you passed away in the financial guide to death.
Your annual pension fund statement shows the widow’s, widower’s, and orphan’s pensions that your dependents would receive based on your current pension fund benefits.
How high will my children’s pensions be?
If you still have underage children after you retire, you will receive a children’s pension for each dependent child for as long as they remain eligible. The pension is identical to the orphan’s pension that they would receive from your pension fund if you were to pass away (20 percent of a full disability pension).
Which taxes apply to my Swiss occupational pensions?
For residents of Switzerland, pensions from Swiss pension funds are subject to income tax. You must declare your pension as income in your Swiss tax declarations.
If you live outside of Switzerland, then whether or not you have to pay tax on your pension depends on the laws of the country you live in. Depending on which country you live in, a Swiss withholding tax may be deducted from the pension payments you receive by your Swiss occupational pension fund. Whether or not you can reclaim that withholding tax depends on which country you live in. You can find detailed information in the financial guide to leaving Switzerland.
Mortgages from pension funds
Some pension funds offer mortgages that are only available to their participants. When looking at mortgage offers, it can be beneficial to check whether an occupational pension fund you are enrolled in has special mortgage offers, and how they compare to other mortgage offers.
More on this topic:
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Swiss pensions: Lump-sum or lifelong pension?
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