Calculator Swiss Public Pension

Switzerland's pension system is built on three pillars, a model often cited as one of the most robust in the world. Unlike the US Social Security system (a single pay-as-you-go program) or the UK's flat-rate State Pension, Switzerland spreads retirement income across three distinct sources:

The goal is to replace roughly 60% of your last salary through the 1st and 2nd pillars combined. The 3rd pillar fills the remaining gap. For expats, this structure often feels more complete than a single-pillar system, but requires understanding each layer.

The AVS (Assurance-vieillesse et survivants) is the mandatory state pension. It operates on a pay-as-you-go basis, similar to US Social Security, but with key differences:

• Minimum annuity: CHF 1,260/month for a full contribution record.
• Maximum annuity: CHF 2,520/month (exactly double the minimum). Unlike US Social Security, where high earners get proportionally more, Swiss AVS is heavily redistributive.
• Full contribution period: 44 years (age 21 to 65). Each missing year reduces the annuity proportionally.
• Reference age: 65 for both men and women (since AVS 21 reform).
• Early retirement: Possible from age 63, with a 6.8% reduction per year of anticipation. This is steeper than the US penalty (~6.7%/year before full retirement age).
• Deferral: Up to age 70, with a 5.2% bonus per year of deferral. Less generous than the US deferral credit (8%/year up to 70).

For expats: If you leave Switzerland, your AVS contributions are generally not refundable (except for citizens of non-EU/EFTA countries). However, bilateral agreements with EU, US, and other countries can coordinate your contribution years to meet minimum qualifying periods.

The LPP (Loi sur la prevoyance professionnelle) is the mandatory occupational pension for all employees earning above CHF 22,680/year. It is a funded scheme (real capital, not pay-as-you-go), more comparable to a US 401(k) or UK workplace pension, except it is mandatory and has legally defined parameters.

• Coordinated salary: Your insured salary minus the coordination deduction (CHF 26,460). Only this portion generates pension contributions.
• Age-based contributions (bonifications): Unlike a flat US 401(k) match, Swiss LPP contributions increase with age:

  25-34 yrs

  7%

  35-44 yrs

  10%

  45-54 yrs

  15%

  55-65 yrs

  18%

• Conversion rate: 6.8% minimum (mandatory LPP). Your accumulated capital is multiplied by this rate to determine your annual annuity. For example, CHF 500,000 x 6.8% = CHF 34,000/year (CHF 2,833/month).
• Payout options: Annuity (default), lump-sum capital, or a mix. The choice depends on your pension fund's rules and has significant tax implications.

• Check your AVS gaps: Request an Individual Account Extract (extrait de compte individuel) from your compensation office. Missing years permanently reduce your annuity.
• LPP buy-back: You can buy back missing LPP years, which is fully deductible from taxable income. This is especially valuable for expats who arrived mid-career.
• Annuity vs. capital: The LPP annuity guarantees lifetime income; the capital option offers flexibility but requires self-management. Most financial planners recommend a mix.
• Target 60%: The 1st and 2nd pillars aim to replace about 60% of your last salary. Use the 3rd pillar (see Private Pension calculator) to fill the gap.
• Bilateral agreements: If you have worked in the EU, US, or other treaty countries, your contribution years may count toward Swiss minimums. Contact your local AVS office.