1st pillar – Minimum income guarantee

The first pillar of the Swiss pension system encompasses:

AHV old-age and survivors' insurance
Disability insurance
Income replacement scheme
Supplemental benefits

The first pillar is designed to provide a safety net, i.e. pensions assuring a minimum income necessary to meet one’s basic needs.

Who is insured?

Mandatory coverage extends to all individuals residing or working in Switzerland and Swiss citizens employed abroad by the Confederation or the qualifying institutions designated by the Federal Council. Swiss citizens residing abroad and employees of Swiss companies located abroad are eligible for voluntary coverage under specific circumstances.

Financing and contributions

Anyone covered under AHV is subject to contributions, with the exception of children; children are covered and entitled to benefits (children’s and orphans’ pensions) without themselves being subject to contributions. The employer deducts employee contributions when doing the payroll and forwards these amounts along with the employer’s contribution to the compensation office. Self-employed individuals remit the relevant amounts directly to the compensation office. Contribution amounts are calculated based on income directly subject to federal tax. Contributions payable by non-working individuals are calculated based on contingency income and assets. Non-working and self-employed individuals must register themselves with the compensation office.