Retirement provision for career and family

Retirement provision for career and family

Are you in the middle of your career and do you have many plans? Do you want to travel the world, start a family or buy your own home? Then now is the right time for your retirement provision. With the right retirement provision solution, you can ensure that you have sufficient financial resources for life. Even if something unexpected happens.

Good to know

We are getting older and older

Forecasts predict that by 2060, 2.6 working people will be funding each pension. In 1990, there were four working people per pension. This challenge shows that saving privately for retirement is becoming increasingly important.

Smart savings pay off

Save money for your future. The earlier you start, the more you can benefit from opportunities for returns. Plus, with a pillar 3a solution, you can save on taxes every year.

Protect your loved ones

No one is immune to strokes of fate. With death and disability insurance, you can protect yourself and your family.

Frequently asked questions about retirement provision

How does Switzerland’s three-pillar concept work? How does retirement provision work on a part-time basis? In our FAQs, you will find answers to frequently asked 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.

I have been absent from work for over one year. Does this affect my retirement provision?

Yes, it does. If you leave your job, for example, you will cease to be eligible for risk benefits for death and disability in the 2nd pillar. Your retirement assets will be transferred to a vested benefits account. To ensure that there are no gaps in contributions to old-age and survivors' insurance (OASI), you should register with the OASI compensation office and pay the minimum contribution each year, unless you are married and the minimum contribution is paid via your spouse.

Request advice

It is best to contact your advisor to close any gaps with an individual solution.

As a mother, I am no longer gainfully employed. Does that have an impact on my retirement provision?

Yes, it does. Depending on whether you are a single parent or married, the situation is different.

Single, non-working mothers.
As a single, non-working mother, you are classified as a non-working person. To avoid a gap, you should register with your compensation office and pay the minimum contribution. This applies if you are absent from work for one year or more. You will no longer be insured under the 2nd pillar. Your existing savings balance will be transferred to a vested benefits account. 

Married, non-working mothers
For OASI, the minimum contribution is paid via your spouse. However, you will no longer be insured under the 2nd pillar. Your existing savings balance will be transferred to a vested benefits account.

Request advice

It is best to contact your advisor to close any gaps with an individual solution.

What is better: if I make pension fund purchases or if I pay into pillar 3a?

First, you should make maximum use of pillar 3a. This is because the deductible contributions do not add up, but expire at the end of the year. On the other hand, possible pension fund purchases do not expire. You can also close any existing gaps in the pension fund in the following year. 

Note that pension fund purchases three years before retirement have an impact on how you will be permitted to withdraw your pension fund assets. Specifically, in this case, you will be required to withdraw your balance as a pension. In the event of a lump-sum withdrawal, the tax saved on the purchase is reclaimed.

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