Retirement provision for students: Save and protect against risks

Education and retirement provision

Are you young, unattached and in the middle of your studies? That's great, because retirement provision can be flexible and inexpensive. With the right retirement provision solution, you can save for big dreams like self-employment and home ownership. And you can protect yourself against the financial risks that arise if something unexpected happens or you fall seriously ill.

Good to know

Smart saving

Retirement provision isn't just about retirement. It's also about saving for big dreams. If you start thinking about retirement provision early, you can avoid gaps and save up for your goals.

Stay flexible

With us, you can tailor your retirement provision solution to meet your needs. Would you like to study abroad? Are you taking some time off? Adapt your retirement provision solution to your life situation at any time.

Three Swiss francs a day

With just three Swiss francs per day, you can protect yourself in the event of disability. After all, being unable to work for a long time is something that can happen to anyone. Or would it be enough for you to get by on just 60 percent of your current salary?

Frequently asked questions about retirement provision

How does the Swiss three-pillar principle work? What retirement provision solution makes sense for young people? In our FAQs, you will find answers to important questions.

How does Switzerland’s three-pillar concept work?

The Swiss retirement provision system is based on three pillars:

  • state retirement provision (1st pillar)
  • occupational retirement provision (2nd pillar) 
  • private retirement provision (3rd pillar)

The aim of the Swiss retirement provision system is to provide the country's population with a reliable income for all life situations. For example, after retirement, in the event of the death of a partner or in the event of permanent disability due to illness or accident. 

1st pillar – state retirement provision

The 1st pillar is about ensuring subsistence. This pension is intended to cover the minimum necessary living requirements. The 1st pillar consists of old-age and survivors' insurance (OASI), disability insurance (DI) and the income compensation scheme (EO).

2nd pillar – occupational retirement provision

The 2nd pillar ensures your accustomed standard of living. For occupational retirement provision, employees and employers pay at least the same amount into a pension fund. The employer can also volunteer to pay more.

3rd pillar – private retirement provision

The assets in the 3rd pillar serve to close any pension gaps from the 1st and 2nd pillars. It also allows you to retire earlier or fulfill dreams and wishes after retirement.

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Bank or insurance: what are the differences in the 3rd pillar?

The biggest differences between a pillar 3a solution from a bank or an insurance company relate to the risk protection for you and your family, your savings goal and the period of insurance.

Risk protection for families and savings goal
With an insurance company, you take out an insurance contract under pillar 3a. This includes insurance coverage in the event of disability and/or death. This means that if you become disabled, your insurance will pay the annual amount due into pillar 3a for you. You will therefore continue to save for retirement, even if you can no longer work. Depending on the retirement provision solution you choose, you will also be paid a disability pension until retirement. In any case, you will meet your defined savings target. In the event of death, a lump-sum death benefit will be paid to your surviving dependents. This means that your loved ones will at least be protected from the financial consequences of this misfortune. You pay for this insurance coverage with a portion of your premium.

When you open your pillar 3a with a bank, the main focus is on the savings process. You and/or your family will not be protected against the financial consequences of disability or death. If you can no longer pursue your work, you will no longer be permitted to pay into pillar 3a. In this case, you will not reach your defined savings goal. 

Period of insurance
Insurance contracts under pillar 3a always have a fixed period of insurance. This usually extends until the normal retirement age. You undertake to pay a certain amount into the pillar 3a policy on a regular basis. 

After the third insurance year, however, you have the option of pausing payments for up to three years. Insurance coverage does not expire in this case. This means that you will continue to be fully insured if, for example, you go on parental leave or spend time abroad. The only consequence is that your savings target will be reduced by the amount of the paused payments.

When do I have to start paying contributions to OASI?

The time to start paying OASI contributions depends on whether or not you are gainfully employed.

  • As a gainfully employed person: You start paying OASI contributions the year you turn 18.
  • As a non-gainfully employed person: You start paying contributions no later than the year you turn 21. It does not matter whether you receive an income or not. 

Are you studying and not in paid employment? In that case, you should pay the minimum amount of CHF 503 to your OASI compensation office in 2022. Otherwise, you will be missing contribution years. This may result in your OASI pension being reduced upon retirement.

What happens if I do not pay the minimum OASI contribution?

If you do not pay in the minimum contribution, your OASI pension will be smaller upon retirement. To avoid pension reductions, women need to demonstrate 43 years of contributions and men need 44. You have the option to make up for any missed contribution years within five years. After that, this option expires.

Can students or apprentices pay into pillar 3a?

In Switzerland, anyone with earnings from gainful employment subject to OASI contributions can pay into pillar 3a. Therefore, this includes gainfully employed students and apprentices. The amount they can pay in depends on whether they are affiliated with a pension fund. If they are, they can pay in a maximum of CHF 6,883 in 2022. Gainfully employed students and apprentices who are not affiliated with a pension fund may pay in a maximum of 20% of their net earnings from gainful employment. They may deduct the amount paid from their taxable income when filing their tax return.

Students without earnings from gainful employment subject to OASI contributions cannot pay into pillar 3a.

I am still young and unattached. What retirement provision makes sense for me now?

Especially when you are young, securing your salary is important. After all, you haven't been working for very long. Imagine having to make do with 60 percent of your current salary for the rest of your life. Protect yourself with disability insurance.

Build up additional capital for the future with unit-linked life insurance. Since the investment horizon is very long, we recommend choosing an investment with a high equity ratio.

I am in my late 20s and still at university. Does my long period of study affect my pension?

Yes, it does affect your occupational retirement provision (pension fund). However, in most cases, missing contributions can be minimized with higher wages. In addition, you can still make pension fund purchases at a later date.

If you are studying, paying the minimum OASI contribution each year is important. In 2022, this will be CHF 503. These minimum contributions will also be minimized later by your higher wages.

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