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Guide

Pension & Retirement

Retirement provision in Switzerland rests on three pillars: the state OASI (1st pillar), occupational pension through a pension fund (2nd pillar), and private provision (3rd pillar). The first pillar covers basic needs, the second maintains the accustomed standard of living, and the third closes individual gaps.

The essentials

  • Maximum OASI pension in 2026 for an individual: CHF 2'520 per month (CHF 30'240 per year); minimum pension CHF 1'260.
  • Minimum conversion rate under the OPA mandatory scheme: 6.8% at reference age 65; the reform to reduce this to 6.0% was rejected on 22.09.2024.
  • The ordinary reference age for women is being raised to 65 in stages under the AHV 21 reform.
  • Pension fund benefits may be drawn as a pension, a lump sum, or a combination of both; withdrawal typically requires advance notification of several months.
  • In December 2026, a 13th OASI old-age pension will be paid for the first time, as a supplement to the December pension. It corresponds to one twelfth (8.3333%) of all monthly pensions drawn from January to December 2026.
  • OASI old-age pensions were not adjusted as at 1 January 2026; the last adjustment took effect in January 2025. Survivors' and disability pensions under the mandatory occupational scheme running since 2022 were adjusted to inflation for the first time in January 2026, by 2.7%.

Sources: BVG Art. 14, Höhe der Altersrente (fedlex, DE) · BVG Art. 37, Form der Leistungen (fedlex, DE)

How the assets turn into a pension

The pension from an occupational fund is the result of a calculation: the accumulated retirement assets are multiplied by the conversion rate (art. 14 BVG). For the mandatory portion the minimum rate is 6.8% at reference age 65. The BVG sets minimum requirements only, so it prescribes no rate for the extra-mandatory portion; funds with a combined plan must at least reach the BVG benefit overall. The Federal Council reports at least every ten years on how the rate is set; the reform lowering it to 6.0% was rejected on 22 September 2024.

Pension, capital or both

Benefits are paid as a pension as a rule. A legal entitlement to capital exists for one quarter of the retirement assets relevant to the benefits actually drawn (art. 37 BVG). Anything beyond that depends on the fund's regulations, which may allow the choice and set a deadline for it. If the retirement pension would come to less than ten per cent of the minimum AHV pension, the fund may pay it out as a single lump sum on its own.

Drawing the AHV pension early or late

The AHV pension can be drawn from the age of 63, in full or as a share between 20 and 80 per cent (art. 40 AHVG); women of the transition generation may draw from 62, with their own reduction rates (art. 40c AHVG). Drawing it early reduces it for life by the actuarial equivalent; for low incomes art. 40a AHVG provides for a reduction lowered by 40 per cent, but the rates this requires will be set by the Federal Council on 1 January 2027 at the earliest. Conversely, the start can be deferred by one to five years, and the pension rises accordingly (art. 39 AHVG). No children's pensions are paid while a pension is drawn early.

Frequently asked questions about Pension & Retirement

The first pillar (OASI/DI) is compulsory and covers basic needs in old age. The second pillar (pension fund, OPA) is compulsory for employees above a minimum salary and supplements the OASI. The third pillar is voluntary and private. Together they are intended to maintain the accustomed standard of living.
When you change employer, your previous pension fund transfers the accumulated retirement savings to the pension provision institution of your new employer. If no new fund takes over, the savings are transferred to a vested benefits account or custody account, where they remain tied until you re-enter an occupational pension scheme or make a withdrawal.
Both options have advantages and disadvantages. A pension provides a lifelong, predictable income; a lump sum offers greater flexibility and can be passed on to heirs, but is taxed as a one-off payment. A combination is often possible. The right choice depends on your health, assets, and family circumstances. Tax treatment may change.
The earlier you start, the more room for manoeuvre you have: voluntary buy-ins to a pension fund, Pillar 3a contributions, and staggered capital withdrawals all take effect over years. A full review of your pension situation around ten to fifteen years before retirement gives you time to identify and close any gaps.
Two changes. In December 2026, a 13th OASI old-age pension will be paid for the first time, as a supplement to the December pension and amounting to one twelfth of all monthly pensions drawn in 2026. Its financing is only partly settled: in June 2026 parliament adopted an increase in VAT of 0.4 percentage points from 2028, which is subject to a popular vote on 29 November 2026. Second, survivors' and disability pensions under the mandatory occupational scheme running since 2022 were adjusted to inflation for the first time in January 2026, by 2.7%. The OASI old-age pensions themselves remained unchanged.

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This overview is for general information purposes only and does not constitute investment, legal or tax advice. It is a simplified summary of the legal position and tax treatment.

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