Pillar 1a

In Switzerland, the term pillar 1a is sometimes used to refer to the old-age and survivors insurance (OASI) provided by Swiss social security offices. This insurance is meant to provide a basic income to policyholders after they reach retirement age.

The pillar 1a, together with the pillar 2a (obligatory occupational pension fund savings and vested benefits), the pillar 2b (voluntary occupational pension fund savings), the pillar 3a (regulated voluntary retirement savings) and the pillar 3b (unregulated voluntary retirement savings), makes up the Swiss retirement funding system.

In Switzerland, all registered adult residents are required to participate in the OASI scheme and to make contributions based on their income and personal wealth, with a minimum annual contribution applying to individuals who do not have an income or wealth. This sets the pillar 1a apart from the pillar 2a which can only be actively used by employed residents and the pillar 3a which can only be used by residents who earn an income.

In the case of residents who are employed more than 8 hours per week, 50% of the contribution owed is deducted directly from the employee’s salary by their employer. Their employer is required to cover the remaining 50% of the OASI contribution owed. Swiss employers are required to forward OASI contributions to social security offices on behalf of employees.

The benefits which you receive after you reach retirement age depend on the size of contributions paid into the OASI scheme and on the length of time over which you paid contributions. An individual who pays the minimum contribution from the time they turn 18 years old until they reach standard retirement age (64 for women, 65 for men) will receive the lowest possible full pension. An individual who pays the maximum contribution from the time they turn 18 years old until they reach standard retirement age will receive the maximum possible full pension.

Pensions are reduced in the case of early retirement (up to 5 years ahead of standard retirement age) and increased in the case of late retirement (up to 5 years after standard retirement age). Individuals who do not contribute to the OASI throughout their entire working life will receive a partial pension based on the length of time over which they contributed and the size of their contributions. Depending on these factors, their pension may be higher or lower than the minimum full pension.

The survivors insurance provided by the pillar 1a provides a basic pension to individuals who are dependent on OASI policyholders who die either ahead of or after reaching retirement age. Survivors pensions are also based on the contributions paid in to the OASI by the policyholder.

More on this topic:
Swiss 3a retirement account comparison
Swiss social security forum

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