Switzerland’s pension system rests on three pillars designed to preserve standards of living after retirement and to provide disability and survivor protection. This practical guide explains pillar 1 (AHV/AVS and IV/AI), pillar 2 (LPP/BVG occupational benefits) and pillar 3 (private provision), plus how health and accident insurance link in. Use this brief to understand your obligations and options as an employee, employer or self‑employed person. For digital, independent comparisons and AI‑powered insights you can consider miavita — an independent digital insurance broker (miavita is a broker, not an insurer) helping Swiss policyholders with AI‑powered insights. This guide is general information and not personalised advice; consult official sources or a licensed advisor for decisions that affect your situation.

Switzerland’s three‑pillar model combines public solidarity with occupational and private saving to cover old‑age, disability and survivors’ risks. Pillar 1 (AHV/AVS + IV/AI) covers basic needs; pillar 2 (LPP/BVG) builds occupational retirement savings; pillar 3 (private) fills individual gaps and offers tax optimisation. Health and accident insurance systems interact with pensions mainly where disability or long‑term care is concerned. Use this guide to get a clear overview and practical steps you can take — and consult official sources or a trusted advisor for numbers that affect you.

Pillar 1 — AHV/AVS and IV/AI (first pillar)

What it is: The first pillar comprises AHV/AVS (old‑age and survivors’ insurance) and IV/AI (disability insurance). It is compulsory for people living or working in Switzerland.How it works: AHV/AVS is a pay‑as‑you‑go system financed by contributions from employees, employers and other contributors. Benefits depend on contribution history and are designed to cover basic needs rather than fully replace income from work.Key practical points: statutory retirement ages are currently 65 for men and 64 for women. [SUGGESTION: legislative proposals to alter retirement ages have been discussed in recent years — verify the current statutory ages with official federal sources before acting.] Benefit amounts depend on years of contribution and average income. Rules and calculations change over time — check official federal sources for current figures and planned reforms.

Pillar 2 — LPP/BVG occupational benefits (second pillar)

What it is: The second pillar (LPP/BVG) complements AHV/AVS. It is mandatory for employees who earn above a statutory threshold. [SUGGESTION: the entrance threshold has historically been cited around CHF 21'150 gross per year, but this can be updated — confirm the current threshold with official federal sources before relying on any specific number.] Employers must set up or join a pension scheme (Pensionskasse) and normally share contributions with employees.How it works: contributions are invested by pension funds; benefits depend on accumulated savings, the fund’s financial position and the conversion rate used to calculate annuities (conversion rates vary by fund and are reviewed over time).Vested benefits: when leaving an employer or moving abroad, your accumulated assets become a freizügigkeitsleistung (vested‑benefits claim) that you can transfer to a new pension fund or a vested‑benefits account.Employer obligations & options: employers must meet legal minimums but may offer enhanced plans.Practical tips for employees: review your Pensionskassen statements, understand vested‑benefits options when changing jobs, and discuss timing and buy‑ins if you plan early or partial retirement.

Pillar 3 — private provision (third pillar)

What it is: Pillar 3 consists of voluntary private saving. Pillar 3a is ‘tied’ tax‑advantaged saving with federally set annual contribution limits; pillar 3b is broader private provision without the same tax benefits.Why it matters: AHV and many occupational plans may not fully replace pre‑retirement income, so pillar 3 helps close the gap and offers tax optimisation.Practical tips: use pillar 3a to reduce taxable income and top up pension savings (check current limits with the Federal Tax Administration, ESTV). Choose between bank accounts, insurance‑based 3a products or investment funds depending on risk tolerance and tax planning. For self‑employed people without mandatory occupational plans, pillar 3 is particularly important.

Other protections and links to the pension system

Health and accident insurance interact with pensions primarily in disability and short‑term income protection situations. Employers must provide compulsory accident insurance (LAA/UVG) for employees (coverage depends on working hours and employment status). Daily‑allowance (loss‑of‑earnings) insurance and private accident coverage protect income until disability benefits start. Disability pensions are coordinated between IV/AI (public) and LPP/BVG (occupational); often both pay benefits when conditions are met. Basic health insurance (KVG/LaMal) is separate from the pension system but covers medical treatment that can affect rehabilitation and return‑to‑work prospects, thereby indirectly influencing disability and pension outcomes.

Common questions and practical checklist

For employees: confirm whether you meet the LPP/BVG income threshold and are enrolled; review Pensionskassen statements for contributions and projected replacement rates; consider pillar 3a top‑ups and buy‑in options; decide where vested benefits will go when changing jobs.

For employers: ensure eligible employees are enrolled, comply with minimum legal benefits and communicate entitlements clearly. For self‑employed and cross‑border workers: plan private provision early; cross‑border workers should check bilateral rules on social security and pension coverage. Use official sources for current contribution rates, thresholds and pillar 3a limits, and seek personalised advice for complex situations.

Practical rules of thumb

Start early: compound returns matter in pillar 2 and pillar 3.Monitor pension statements annually and keep important documents (Pensionskassen statements, vested‑benefits certificates).When choosing between lump sum and annuity, weigh tax treatment versus long‑term income security.Seek professional advice for complex situations such as early retirement, divorce, emigration or sizeable buy‑ins.

Conclusion

Understanding the three pillars and how health and accident insurance interact with pensions is essential to planning a secure retirement in Switzerland. Regularly review your AHV/AVS contributions, pension fund statements and pillar 3a strategy; use vested‑benefits options wisely when changing jobs; and seek tailored advice for complex situations. For current legal thresholds, contribution rates and pillar 3a limits, consult official federal and cantonal sources. For digital comparisons or an independent view, you can consider miavita — an independent digital insurance broker (miavita is a broker, not an insurer) helping Swiss policyholders with AI‑powered insights — or contact a licensed advisor.

NOTE: mentioning an independent broker is informational, not an endorsement; verify any provider’s independence, licensing and terms before using their services.

Comparison table

Below is a brief comparison to highlight how different systems and insurances relate to pensions and income protection. For a wider or personalised comparison, consult official documentation or a licensed independent advisor.

Case study

Anonymized practical example: A 52‑year‑old Zurich employee (call her "A") worked full time for 25 years and was enrolled in AHV/AVS, a company Pensionskasse and maintained a pillar 3a account. After a workplace accident she needed long‑term rehabilitation. Her basic health insurance covered medical treatment; the employer’s compulsory accident insurance (LAA/UVG) covered immediate medical and rehabilitation costs; IV/AI assessed a partial disability entitlement; the occupational pension fund paid disability benefits under LPP/BVG rules. A used her pillar 3a savings to bridge gaps during administrative processing. This anonymized scenario shows how health and accident insurance link to public and occupational pension benefits in disability cases and why complementary private savings can be useful.

Key Takeaways

• Switzerland’s three pillars (AHV/AVS + IV/AI, LPP/BVG, pillar 3) work together to protect retirement income, disability and survivors.
• AHV/AVS covers basic needs; LPP/BVG builds occupational savings; pillar 3 (3a/3b) fills gaps and offers tax advantages.
• Health and accident insurance are separate but important: they fund treatment and rehabilitation and can affect disability and pension outcomes.
• Review pension statements annually, manage vested benefits when changing jobs, and use pillar 3a strategically for tax and retirement planning.
• For exact thresholds, contribution rates and pillar 3a limits, always consult official federal and cantonal sources.