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The three pillar concept

The pension fund governance in Switzerland

1st pillar: state provision

The 1st pillar is compulsory. It integrates old age and survivors' insurance, disability insurance as well as additional services and covers minimum living costs in the case of retirement, invalidity or death. The benefits of the state provision are dependent on one's average yearly income.

2nd pillar: occupational pension

The 2nd pillar includes the compulsory occupational pension (BVG) and the compulsory accident insurance (UVG). Together with the 1st pillar, this should make it possible to continue enjoying an adequate standard of living after retirement. The amount of the benefits provided by the pension fund is dependent on the amount of the insured wages.

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3rd pillar: private provision

The 3rd pillar is optional and an important addition to the benefits from the 1st and 2nd pillar. You have a range of options on how to structure your private provision in accordance with your individual needs. Essentially, you can choose between the restricted provision 3a, in which yearly payments of taxable income are deducted, and the free provision 3b.

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