Social security system

Switzerland's social insurance system is based on a comprehensive network of insurance policies that offer people living and working here protection against financial risks. It comprises five main areas: 
1. Old-age, survivors' and disability insurance
2. Health and accident insurance
3. Maternity and military service compensation
4. Unemployment insurance 
5. Family allowances

A central component is the so-called three-pillar system of old-age provision, which consists of state pension provision (1st pillar), occupational pension provision (2nd pillar) and private pension provision (3rd pillar). 

Pillar 2: Occupational pension provision (BVG)
Pillar 2 is a mandatory part of the Swiss social insurance system and supplements the benefits of Pillar 1 (AHV/IV). The aim is to secure the standard of living after retirement and to cover the risks of disability and death.

Basic principles and financing
Compulsory insurance: Employees with an annual salary subject to AHV contributions of CHF 22,050 or more (as at 2023) are compulsorily insured in the occupational pension scheme. The contributions are financed jointly by employers and employees.

Benefits
The occupational pension scheme offers the following benefits.
Retirement pension: After retirement, insured persons receive a pension which, together with the AHV, should cover around 60 % of their last income.

Special features
Occupational pension provision not only covers old age, but also the risks of death and disability.
The mandatory insured salary is between CHF 22,050 and CHF 88,200; higher salaries can be insured voluntarily.

The 2nd pillar plays a central role in the Swiss pension system as, together with the AHV, it secures the majority of income after retirement. It closes the gap between securing your livelihood (1st pillar) and your accustomed standard of living.
In addition, the third pillar serves to close individual pension gaps.
To summarise, occupational pension provision is an essential pillar of the Swiss social security system, guaranteeing financial security for employees and their dependants.
Level of contributions: Contributions are based on the age of the insured person and increase with age. For example, 25- to 34-year-olds pay 7 % of their insured income, while 55- to 65-year-olds pay 18 %.

Funding method: Funding is individualised, with each insured person saving for their own retirement benefit. The employer pays at least half of the contributions.

Disability pension: In the event of disability, a pension is paid based on the accumulated retirement assets and expected contributions until retirement.
Survivors' benefits: Widow's/widower's pensions (60 % of the retirement/disability pension) and orphan's pensions (20 %) are paid in the event of the death of an insured person.
Self-employed persons are not obliged to participate in the 2nd pillar, but can take out voluntary insurance.