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Your Path, Your Future
Switzerland, renowned for its stunning landscapes and precision engineering, offers more than natural beauty. Its attractive combination of high wages, lower taxes, and exceptional work-life balance draws skilled professionals worldwide. From vibrant cities to serene villages, Switzerland seamlessly blends modernity with tradition, making it a top expat destination.
For expats building their careers in Switzerland, the 2nd Pillar of the Swiss Pension System provides a solid foundation for future financial security. This mandatory occupational pension offers substantial benefits, contributing to long-term wealth accumulation.
However, when expats transition to new opportunities or return home, these pension funds are often forgotten or left unmanaged; an oversight that can undermine their potential. Left to stagnate, these funds may incur tax liabilities and fail to grow as intended, diminishing their overall value. Without strategic oversight, these assets remain untapped, limiting your ability to maximise your financial future and secure a comfortable retirement.
Keep Your Financial Flow Uninterrupted
A Sense of Direction
Over 600,000 dormant pension accounts in Switzerland sit unmanaged, losing value to inflation. With taxes on lump-sum withdrawals and residency-based implications, taking control is crucial. At deVere, we optimise your pension strategy, protecting your assets and maximising your retirement benefits for long-term financial security.
Secure Your Future with Precision and Strategy
Retirement planning can be complex, but understanding Switzerland’s three-pillar pension system clarifies the path. The 1st covers basics, the 2nd personalises, and the 3rd offers vital, voluntary financial security for future stability.
1st Pillar - The OASI State Pension
The 1st pillar of the Swiss pension system, the OASI State Pension, serves as the bedrock for your retirement, ensuring a basic level of financial security. This mandatory pension is available to all individuals employed and residing in Switzerland. Currently, the minimum monthly pension is CHF 1,225, with a potential maximum of CHF 2,450. The amount you receive depends on your contributions during your working life. You will be entitled to the full pension if you've consistently contributed to the OASI (Old Age and Survivors Insurance). However, any missed payments can negatively impact your payout. For instance, missing a year's contribution could reduce your pension by around 2.3%, which can be significant, especially for expats who may face challenges maintaining continuous contributions. Higher earners contribute more to OASI, thus securing a greater benefit in retirement
2nd Pillar - The Occupational Pension
The 2nd pillar is a mandatory component of the Swiss pension system and represents the pension you accumulate through your employer during your working years. This pillar is based on your contributions and employers, providing a pension when you reach retirement age. Upon retirement, the amount you receive is calculated based on the funds you've saved and the specific rules of the pension scheme in which you've participated. The 2nd pillar offers flexibility in how you access your funds: you can withdraw up to a quarter of your accumulated balance as a lump sum, or you can opt to take the entire amount as a one-off payment. Alternatively, many individuals choose to receive a monthly pension to ensure a consistent income stream throughout their retirement.
3rd Pillar - Private Pensions
The 3rd pillar is a voluntary savings plan designed to complement the first two pillars, providing an essential boost to your retirement income. While the 1st and 2nd pillars offer some protection, they are unlikely to fully sustain your standard of living in retirement, especially given the rising cost of living. Many professionals opt for the 3rd pillar to maintain their lifestyle and avoid financial shortfalls. It also offers tax benefits and insurance against risks such as death or occupational disability. The 3rd pillar is split into two sections: 3a and 3b.
Pillar 3a is a long-term pension plan that offers tax deductions on contributions, reducing your taxable income for the year. The maximum allowable annual contribution to Pillar 3a is CHF 7,056, and it is available across all Swiss Cantons. It's important to note that this operates on a "use it or lose it" basis each year. Pillar 3b, on the other hand, offers more flexibility with no set contribution limits, allowing you to contribute as much as you like. While tax advantages are less widespread in Pillar 3b compared to Pillar 3a, certain Cantons—such as Geneva—do offer tax reductions under specific conditions. Therefore, if you're looking for more control and flexibility in your retirement savings, Pillar 3b presents a valuable option.
Pillar 3b offers more flexibility, allowing greater freedom in contributions. Unlike 3a, there's no maximum annual contribution. While most Cantons don't offer additional tax reductions, some, like Geneva, do under certain conditions. So, if you want more freedom with your pension savings and potential tax benefits, pillar 3b is worth considering.
Unlock, Cultivate, Thrive.
Unlocking Your Pension’s True Value
Your Swiss pension should work as hard as you do. At deVere, we help expats optimise dormant pensions with tailored solutions, guiding transfers to Cantons with more favourable tax rates. Our experts then create personalised investment strategies to grow your funds, offering flexible withdrawal options for a secure, rewarding retirement.
Build with Purpose. Retire with Confidence.
Protect Your Pension, Secure Your Future
Managing your Swiss pension with deVere ensures strategic growth, tax efficiency, and long-term financial security. Don’t let valuable assets go untapped; let us help you optimise and protect your future.