2nd pillar (2024)

FAQs

Is 2nd pillar mandatory in Switzerland? ›

Pillar 2 of the Swiss three-pillar systems consists of mandatory occupational benefits insurance (BVG). The Swiss Federal Act on Occupational Retirement, Survivors' and Disability Pension Plans (BVG) constitutes a legal framework laying out the minimum requirements for private occupational benefits institutions.

The 2nd (occupational) pillar of the Swiss pension system is intended to complement the 1st (state) pillar, so that you can be sure of receiving a reasonable pension in retirement. If you leave Switzerland, become self-employed or buy a home, you can have your accrued pension capital paid out early.

The first pillar serves to secure subsistence and is the responsibility of the state. The second pillar comprises occupational benefits and is the responsibility of employers. With the third pillar, personal responsibility is called for. With this, a private pension can be built up with state support.

If you leave Switzerland after retirement

They will send your files to the Swiss Compensation Office in Geneva. As soon as you take up residence abroad, this office becomes responsible for you and you will receive your pension from there.

For a comfortable retirement, you would need around $1500 for your daily and monthly living expenses without including rent. For rent, you would need an amount of about $2500 to $3500. Apartments in Switzerland range from $900 being the cheapest accommodation option and $5200 being the most expensive option.

You can choose to take early retirement from the age of 58. You can either take full early retirement (100%) or partial retirement (eg 20%). In the event of partial retirement, full retirement must be achieved in no more than three stages (see "Partial retirement").

The purpose of Pillar 1 – old-age, survivors' and disability insurance, or AHV – is to secure livelihood. Pillar 2 – occupational benefits insurance, or BVG – is intended to maintain the accustomed standard of living in old age. Both Pillar 1 and Pillar 2 are mandatory.

You are entitled to a complete pension if you have a complete contributions record, i.e. if you have the same number of years of contributions as the people from your age class. For men this is 44 years and for women 43 years. If your contributions record is incomplete, you are only entitled to a partial pension.

Amounts paid into the second pillar or Pillar 3a during the year are tax-deductible in full in an individual's tax return. It is therefore usually worth spreading the payments over several years. Tax is only payable when you draw down the money and moreover withdrawals are taxed at a reduced rate.

noun. an upright shaft or structure, of stone, brick, or other material, relatively slender in proportion to its height, and of any shape in section, used as a building support, or standing alone, as for a monument: Gothic pillars; a pillar to commemorate Columbus.

How many 3rd pillar accounts are there? ›

Can I open multiple pillar 3a accounts? The law does not limit how many accounts you can hold. Contributions made in a calendar year may not exceed the maximum amount for pillar 3a (all 3a accounts combined). We recommend holding multiple 3a accounts, as pillar 3a lump-sum payments are taxed progressively.

The 3 pillars of sustainability: environmental, social and economic.

You only need to claim your state pension in the last country where you lived or worked. Your claim will cover all EEA countries, Gibraltar and Switzerland. You don't need to claim for each country separately.

At retirement age

Currently, the minimum old-age pension for a single person is CHF 1,225. - per month, and the maximum pension, CHF 2,450.

That depends on which Swiss bank you use. Some banks let you keep your account. Some let you keep it if you meet certain criteria (receiving a pension or other income in Switzerland, for example). Some banks require you to close your bank account when you leave Switzerland.

Pillar Two of the BEPS 2.0 project, which stipulates a 15% global minimum tax for multinational enterprises with an annual turnover exceeding €750m, is set to reshape the tax framework.

The Federal Council decided at its meeting today that Switzerland will introduce the global minimum tax (“Pillar 2”) in a gradual approach. Specifically, from 1 January 2024, Switzerland will levy a national top-up tax (QDMTT) on profits of Swiss corporations and permanent establishments of international groups.

The 2nd pillar is the occupational pension insurance which mainly comprises the mandatory scheme and the extra-mandatory scheme of the LPP. It covers three risks: old age, disability, death. Unlike the 1st pillar, the 2nd pillar is a funded system.