The three pillars

The pension system in Switzerland rests on three pillars. Each pillar has its own task. Together they are meant to ensure that you have enough money to live on in old age, in case of invalidity or after the death of a partner. This is also called the three-pillar system.

The first pillar is state pension provision: the AHV (old-age and survivors' insurance) together with the IV (invalidity insurance). It is compulsory for everyone and is meant to cover basic needs. The second pillar is occupational pension provision, in other words the pension fund. Employees and employers pay in together. It is meant to help people keep their usual standard of living.

The third pillar is private pension provision. Here you save voluntarily yourself, for example in a pillar 3a account. You get tax deductions for this. That way you have extra money in old age. In principle, you can only withdraw the money in a pillar 3a account from the age of 60. People who only have the AHV and a pension fund often have to live on less money in old age than before.

Memory aid: State, job, self: 1st pillar from the state (AHV), 2nd pillar through your job (pension fund), 3rd pillar you save yourself.