Reader question: How long must I work for 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.
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.
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.