Pensions in Switzerland for expats: clarity instead of headaches

If you live and work in Switzerland as an expat, you’ll sooner or later come across the topic of retirement planning. Often with a frown. Three pillars? Contribution years? Withholding tax?

The terms are complex, the rules unfamiliar, but the topic is essential for your personal future. If you gain an overview, you’ll be better positioned to assess what’s possible in retirement – whether in Switzerland or elsewhere.

The Swiss pension system: the three pillars explained

At its core is the so-called three-pillar principle. It might sound complex at first, but it’s well thought-out. The idea: different sources of retirement income that complement each other.

1st pillar: AHV (state pension)

The Old-Age and Survivors’ Insurance (AHV) forms the foundation. All working people in Switzerland from age 20 contribute on a mandatory basis, including the self-employed. These contributions later secure a basic pension to cover essential living costs.

The amount depends on your number of contribution years and your average annual income. A full pension typically requires uninterrupted contributions from age 20 until retirement (2025: 65 for men, 64 for women).

If you work in Switzerland, AHV contributions are deducted automatically. This means that even as a foreigner, you acquire pension rights, no separate registration required.

2nd pillar: pension fund (occupational pension)

If your annual income exceeds approx. CHF 22,050 (as of 2025), your employer will also enrol you in a pension fund. This occupational pension is funded jointly by the employer and employee.

It complements the AHV and is designed to help maintain your usual standard of living in retirement, covering around 60 % of your final salary on average.

For many expats, this is the first real supplementary pension, and this is often where differences from their home country’s system become noticeable.

3rd pillar: private pension

Despite AHV and pension fund, a pension gap often remains. This is where the voluntary private pension (known as the 3rd pillar) comes into play.

In Pillar 3a, you can save for retirement with tax benefits. Pillar 3b is more flexible, but offers no tax advantages. Both are particularly interesting for expats, as they can create additional financial freedom in retirement.

If you stay in Switzerland long-term, contributing to Pillar 3a lets you benefit twice, better retirement provision and annual tax savings.

Are foreigners entitled to receive a Swiss pension?

A legitimate question, and the answer is reassuringly clear: yes, in principle.

Foreign nationals acquire pension rights through AHV and BVG contributions just like Swiss citizens. The only thing that matters is that contributions were made.

You’re eligible for the AHV pension if you can prove at least one full contribution year and have reached retirement age (2025: 65 for men, 64 for women).

If you’ve paid contributions without gaps from age 20, you’ll receive the full AHV pension. For shorter contribution periods, a partial pension is calculated in proportion to the number of contribution years.

The same applies to the pension fund (2nd pillar): if you were insured and made contributions, you’re entitled to benefits regardless of your nationality.

But there are exceptions: if you worked in Switzerland only temporarily and were exempt from contributing due to a bilateral agreement, you’re not entitled.

However, for most expats this is more of a theoretical case – in regular employment, contributions are deducted automatically, and you acquire pension rights for retirement.

Important to know: if you leave Switzerland permanently, you can no longer pay into the AHV. But your entitlements earned up to that point remain and can later be claimed even from abroad.

How to claim your pension if you leave Switzerland

Many expats return to their home country in retirement or move elsewhere. The good news: your pension doesn’t simply disappear, but the process depends on where you move.

If you move to a country with a social security agreement (EU/EFTA & others)

In this case, it’s simple: Switzerland has agreements with the EU/EFTA and many other countries (including the UK, USA, Canada, Australia, and Japan).

That means your AHV pension will also be paid abroad once you reach retirement age.

If you move to a country without an agreement

Here the situation changes: in these cases, you no longer have a right to an AHV pension. Instead, you can apply for a refund of your AHV contributions without interest, minus any benefits already received.

The payout takes place once you’ve permanently moved abroad.

Occupational pension (2nd pillar) if you move abroad

You can also take your pension fund savings with you, depending on the country – but the rules vary:

• Moving within the EU/EFTA: The mandatory part (BVG) remains locked in a Swiss vested benefits account and can only be withdrawn five years before retirement. The extra-mandatory part can sometimes be withdrawn.

• Moving to a non-EU/EFTA country: The full pension fund balance can potentially be withdrawn, under certain conditions.

Important: payouts from the 2nd pillar are subject to Swiss withholding tax. The rate depends on the canton. In many cases, this tax can be reclaimed if a double taxation agreement exists.

It’s advisable to contact your pension fund before leaving. They’ll explain the steps and give you the right forms.

Private pension (3rd pillar) if you move abroad

If you’ve saved into Pillar 3a, this balance can be withdrawn early when leaving Switzerland permanently since permanent departure is a valid withdrawal reason.

For Pillar 3b (free pension savings), you have full flexibility anyway: funds can be accessed or transferred at any time.

Again, payouts are subject to tax and may be partially reclaimable, depending on your new country and any tax treaties.

Can you combine a Swiss pension with other retirement income?

Yes, that’s generally possible. Many expats draw multiple pensions in retirement: An AHV pension from Switzerland, a state pension from their home country, possibly private retirement contracts

The systems don’t cancel each other out, each provider pays what it owes.

Example:

10 years in Switzerland + 20 years in Germany = A Swiss AHV partial pension, and a German state pension both paid separately.

The same applies to pension funds or occupational pensions from other countries.

In practice, it’s often enough to submit one application in your final country of residence, the authorities will coordinate with international pension providers.

Important: pensions from abroad are usually taxed in your country of residence. It’s worth getting tax advice to avoid double taxation.

Planning your retirement as a foreigner in Switzerland

Solid retirement planning starts with a realistic assessment of your own situation.

Possible steps:

• Identify pension gaps:

  How much would you receive today from AHV and your pension fund? Is that enough to support your desired lifestyle?

• Use tax benefits:

  Contributions to Pillar 3a can be tax-deductible – especially valuable for high earners. And depending on your future country of residence, tax conditions may change significantly.

• Consider professional advice:

  International pension planning is complex. Many people seek early advice for coordinating multiple systems or optimising taxes.

• Stay flexible:

  Life isn’t fully predictable. Your pension plan should be adaptable in case of career breaks, relocations, or changes in nationality.

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Conclusion: pensions without borders, when clarity is the best strategy

Swiss retirement planning might seem confusing at first glance but it’s transparent, reliable, and manageable, even for expats.

With AHV, pension funds, and private pension options, you have access to a system that, with proper planning, can provide a stable retirement, whether you stay in Switzerland or move abroad.

Early preparation and up-to-date information help avoid financial disadvantages, especially when leaving the country. And with the right plan, Swiss pensions can be combined seamlessly with benefits from other countries.