PENSION PROVISION IN SWITZERLAND

The compact network of social insurances and public social welfare protects the people who live and work here as well as their family members from the economic consequences of illness, accident, unemployment, invalidity and other risks. The aim is to prevent poverty in Switzerland. Social security is an important cornerstone of the Swiss state. The focus is personal responsibility and work. Social security in Switzerland is based on the 3-pillar principle (see diagram) and social welfare. They safeguard your livelihood if you or your family members get into financial difficulties due to incapacity for work, unemployment or death. In addition, a pension is guaranteed in old age. If you suffer social hardship, you can ask for help. You can obtain information from the municipality where you live and from Schaffhausen Social Security Department.

PENSION PROVISION IN SWITZERLAND

1st pillar
2nd pillar
3rd pillar

State pension
Occupational pension
Private pension

Livelihood
Continuation of the usual standard of living
Individual supplement

AHV
Old-age and surviving dependents’ insurance

IV
Invalidity insurance

EL
Supplementary benefits

EO
Loss of earning compensation scheme

BVG
Obligatory occupational pension fund

Pillar 2b
Non-mandatory occupational pension fund

Pillar 3a
Tied pension

Pillar 3b
Free pension fund

The pension provision for old-age, death and invalidity is built on three pillars:
1st pillar: the AHV/IV/EO is the basic insurance. Everyone who lives and/or works in Switzerland has obligatory insurance.
2nd pillar: In the occupational pension (pension fund), all employees have obligatory insurance from a certain annual income upwards.
3rd pillar: Private pension provision is voluntary and is financed by personal savings.

AHV and IV

The most important social insurance is the old-age and surviving dependents’ insurance (AHV). Fundamentally, anyone residing in Switzerland is subject to AHV, irrespective of whether they are Swiss or foreign nationals, in employment or not employed. The Schaffhausen Social Security Department can provide information on the statutory pension age. It is possible to retire early but the pension will then be reduced. The contributions to the invalidity insurance (IV) are deducted from the salary along with the AHV contributions. In the event of invalidity, the insurance entitles the insured person to help with reintegration into the employment market or a pension. If you are not gainfully employed or if you are self-employed, you must pay the contributions directly to the compensation fund.

Maternity leave compensation

After giving birth, women in employment are entitled to maternity leave of at least 14 weeks. During this time they usually receive 80% of their wage or salary. To do this they must have been insured for 9 months before the birth and have worked for at least 5 months during the pregnancy. Detailed information can be obtained from the social insurance department.

Parental leave

Gainfully employed fathers are entitled to two weeks’ parental leave (max. 14 days’ money) during the first six months after the child’s birth.

Occupational pension BV/pension fund

From a certain annual income upwards, employees in Switzerland have to join their employer’s occupational pension scheme. The contribution is between 7% and 18% of their annual income. At least half of these premiums must be paid by the employer. The self-employed are not governed by this law.

Family allowances

In Switzerland, employees, self-employed people and the unemployed are entitled to family allowances. Reduced rates may apply to children with a domicile abroad. Children are entitled to child allowances from the first day of their birth month to the end of the month in which they turn 16. For children in education, the allowances apply until they finish education or training, but at the most until they turn 25.

SOCIAL WELFARE

It is social welfare’s task to prevent, alleviate or remedy people’s material and personal need. They are entitled to welfare if they are experiencing personal need, if they do not have enough money to provide for themselves or to pay for their family’s keep. Social welfare is not provided until all the other forms of assistance and support are no longer available or are inadequate. The aim of social welfare is for you to be able to provide for yourself again quickly. Social welfare is not insurance, but assistance from the State. In the canton of Schaffhausen the canton and the municipalities are jointly responsible for organizing social welfare. If you have questions about an individual case, please contact the municipality where you live.