Planning for retirement in a new country can be overwhelming, especially in a place like Switzerland where the systems are well-structured but deeply detailed. For foreigners living and working in Switzerland, understanding how the Swiss pension system works is essential—not only to ensure a comfortable retirement, but also to make the most of the financial benefits available during your stay.
Whether you’re staying temporarily or settling down long term, this guide explains how retirement in Switzerland works for foreigners. We’ll cover the three-pillar system, how contributions are made, how to claim benefits, what happens if you leave the country, and how to start preparing early.
The Three-Pillar Pension System in Switzerland
Switzerland’s retirement system is based on three pillars:
Pillar 1 – State Pension (AHV/AVS)
This is the basic, mandatory public pension provided by the government. Every person who lives and works in Switzerland is required to contribute, including foreigners.
Key features:
- Covers basic living expenses during retirement
- Funded by contributions from employers and employees
- Contributions start from age 17 if employed
- Self-employed individuals contribute fully themselves
In 2025, the contribution rate is around 10.6% of your gross salary, split equally between employer and employee. This contribution also finances other social security benefits, like disability and survivors’ pensions.
The monthly benefit is modest, between CHF 1,225 and CHF 2,450, depending on your contribution years and salary. A full pension requires at least 44 years of contributions for men and 43 years for women. Partial pensions are available for shorter contribution periods.
Pillar 2 – Occupational Pension (BVG/LPP)
The second pillar is a mandatory occupational pension for employees earning more than CHF 22,050 per year. It is managed by pension funds run by employers or pension institutions.
Key features:
- Supplements Pillar 1 to maintain your lifestyle after retirement
- Contributions increase with age and are deducted from your salary
- Employer must contribute at least as much as the employee
Funds are invested and can be withdrawn at retirement as:
- Monthly pension (annuity)
- Lump-sum payment
- Or a combination of both
For many foreigners, this is the most significant part of their retirement fund while living in Switzerland.
Pillar 3 – Private Voluntary Pension
The third pillar is a voluntary private savings plan that lets you save money for retirement in a tax-efficient way.
- Known as Pillar 3a (restricted) and 3b (flexible)
- You can contribute up to CHF 7,056 per year (as of 2025) if you’re employed
- Self-employed people can contribute more—up to 20% of their income, capped at CHF 35,280
- Contributions to Pillar 3a are tax-deductible
Popular providers include banks (like UBS, Credit Suisse), insurance companies, and fintech platforms like VIAC or Frankly.
Can Foreigners Participate in the Swiss Pension System?
Yes, foreigners working legally in Switzerland are automatically enrolled in Pillars 1 and 2. You also have the option to open a Pillar 3a plan for private savings if you have a Swiss income.
Requirements:
- Must have a valid residence and work permit (e.g., B or C permit)
- For EU/EFTA nationals, coordination agreements exist to ensure your pension rights are protected across borders
- For third-country nationals, lump-sum withdrawals may be taxed upon leaving
If you’re not working but living in Switzerland (e.g., accompanying spouse or retiree), you may still be required to pay minimum AHV contributions.
Retirement Age and Early Retirement Options
The standard retirement age in Switzerland is:
- 65 years for men
- 64 years for women
You can opt for early retirement up to two years earlier, but your pension will be reduced permanently. Delaying retirement is also possible and increases your pension payout.
Pillar 2 and 3a pensions can often be accessed up to five years before standard retirement, but rules vary by provider and canton.
What Happens If You Leave Switzerland?
Many expats stay in Switzerland temporarily and wonder what happens to their pension savings when they leave.
Pillar 1
- You may receive a pension abroad if you’re from an EU/EFTA country or a country with a bilateral agreement.
- If not, and you contributed for less than one year, your contributions may not be refundable.
- Refunds are generally not allowed for EU/EFTA nationals.
Pillar 2
- If you leave permanently and are moving outside the EU/EFTA, you can request a full cash payout.
- If moving to an EU/EFTA country, you can only withdraw the extra-mandatory portion; the rest must be kept in a vested benefits account.
Pillar 3a
- You can withdraw Pillar 3a funds early when permanently leaving Switzerland.
- It’s essential to notify your provider and provide evidence of emigration.
Keep in mind that cash payouts are taxed at a reduced rate, usually based on your canton of residence at the time of withdrawal. Some expats strategically move to low-tax cantons like Zug or Schwyz before withdrawing.
How to Track and Manage Your Swiss Pension as an Expat
Staying organized is key to getting the full benefit of your Swiss pension. Here’s what you can do:
- Keep a record of your AHV number (social security number in Switzerland).
- Track your pension fund statements from your employer (BVG/LPP).
- Open a vested benefits account if you leave a job and stay in Switzerland without starting another.
- Consult with a tax advisor before withdrawing large sums, especially when leaving the country.
- Use online pension calculators to estimate your benefits.
If you’ve worked in multiple countries, you may be entitled to retirement benefits from each. Be sure to consolidate your contributions and check eligibility rules with the social security offices in both countries.
How to Start Planning Early
If you’re planning to retire in Switzerland or simply want to make smart financial decisions during your stay, here are a few tips:
- Start a Pillar 3a plan early to reduce taxes and grow your savings over time.
- Maximize employer contributions by checking with HR if you can make voluntary additional contributions to Pillar 2.
- Review your pension fund’s investment strategy to match your risk profile and time horizon.
- Consult an advisor familiar with expat needs if you’re unsure about your entitlements.
Also, remember that Switzerland has one of the highest costs of living in the world. Even with a strong pension, planning extra savings through Pillar 3 or personal investment accounts is wise.
Final Thoughts
Switzerland’s pension system is robust and offers foreigners a fair opportunity to build retirement security—whether they stay for a few years or settle permanently. Understanding how Pillars 1, 2, and 3 work, and how to manage them effectively, ensures that you’re not leaving money on the table or missing out on valuable tax benefits.
Start early, stay organized, and make use of the many financial tools and advisors available in Switzerland. Your future self will thank you.