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Reader question: How long must I work in Switzerland to qualify for a pension?

If you are planning to retire in Switzerland, you may be wondering how long you need to work for to qualify for a pension. The answer depends on several factors.

Reader question: How long must I work in Switzerland to qualify for a pension?
The amount of your Swiss pension depends on several factors. Photo: Pixabay

If you are employed in Switzerland, you know that the country has a three-pillar pension system — two of them are obligatory, while the third one optional.

The first pillar is the Old Age and Survivor’s Insurance (OASI), also known as AHV in German-speaking regions, and as AVS in French and Italian cantons. The second is the occupational pension (BVG / LPP), which includes the first pillar and is compulsory for employees who earn more than 21,300 francs per year.

Under this occupational pension, employee and employer each contribute half.

Together, the two pillars aim to achieve a total pension income of 50 to 70 percent of your earnings. How much income they will generate once you retire — the current age is 65 for men and 64 for women (the latter set to increase to 65) — depends on the duration of your employment in Switzerland, as well as your income and contributions to the social scheme.

READ MORE: EXPLAINED: How does the Swiss pension system work – and how much will I receive?

A full pension — whatever amount that may be in your case — is based on average lifetime earnings and contributions to the OASI scheme. “Lifetime” in this particular context means you have been in full-time, continuous employment for 44 years if you are a man and 43 years if you are a woman.

Currently, the minimum first-pillar pension for a single person is 1,195 francs per month, and the maximum, 2,390 francs.

These calculations are based on full-time employment. If you work fewer hours, your OASI contributions (and ultimately your retirement income), will be reduced proportionally.

According to a government site, “to get a maximum pension, your average annual income will need to be at least around 86,040 francs”.

Two other factors can impact the amount of your pension — either up or downward.

One is that you haven’t worked and paid your OASI contributions for 44 years.

The other is if you stop working a year before you turn  65 / 64; in this case, your pension will be reduced by 6.8 percent, and by 13.6 percent if you retire two years early.

However, your pension will increase if you keep working beyond the statuary retirement  age.

What about foreign residents?

The two compulsory pillars of the pension scheme  — both in terms of OASI contributions and payouts after retirement — apply to anyone employed legally in Switzerland, regardless of nationality.

However, as many foreigners start working in Switzerland later than the Swiss, the amount of benefits they will receive after retirement will be proportionally lower.

You can calculate your pension here.

An important point to keep in mind is that you will keep receiving your Swiss pension even if you move out of Switzerland.

READ MORE: EXPLAINED: Everything you need to know about retiring in Switzerland

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Reader question: Can I leave Switzerland to fill up my car in Germany?

From Wednesday, June 1st, Germany will reduce taxes on petrol by around 30 cents per litre. Can Swiss residents cross the border and fill up?

Reader question: Can I leave Switzerland to fill up my car in Germany?

Among many of the common items to be hit with inflation over the past few months, perhaps the most painful has been the cost of petrol. 

While drivers are all to aware of the price hike when they visit the pump, even people without cars have been hit due to the flow on effect of increases in the cost of petrol. 

To soften the blow, the German government has put in place a temporary reduction in tax on petrol and diesel across the country. 

Petrol costs will fall by around 30 cents per litre – or as much as 35 cents including VAT – while diesel costs have been slashed by 17 cents per litre. 

Can Swiss drivers cross into Germany and fill up?

Yes. Germany will not charge foreign drivers different amounts, meaning everyone can benefit from the tax cut. 

Some countries, like Hungary, have restricted fuel discounts only to locals, however Germany has declined to do so. 

German automobile club ADAC expects a significant increase in Swiss customers for German petrol stations. 

READ MORE: Where in Switzerland can you find the cheapest fuel?

Is a similar plan being considered in Switzerland? 

Some Swiss petrol stations have complained about the German government’s decision, saying they fear significant losses if customers decide to cross the border and fill up. 

A similar decision by the Italian government saw drivers flock over the border, with fuel companies in the southern canton of Ticino saying they saw a 35 percent drop in customers. 

The Swiss government is currently considering a tax cut. The issue will be debated in mid-June, with the populist Swiss People’s Party advocating for a cut in costs. 

National Councillor Franz Grüter said the government should do more to release the pressure. 

“The pressure is enormous, I know people who turn off the gas pump because they don’t know how to pay for the gas. The federal government collects hundreds of millions of francs in additional taxes because fuel prices are so high.”

If implemented however, the impact of such a change would be less significant than in Germany, as Switzerland already has comparatively low tax on fuel. 

Only Austria has lower fuel taxes than Switzerland (among Switzerland’s neighbours).

Fuel in Switzerland: Why are Germans crossing the border to fill up?