Expats flock to Switzerland for the high standard of living and good wages – but few realise how the Swiss pension system will affect them.
Brexit rules may see some changes for British expats – but the current rules allow workers from the UK to qualify for a Swiss state pension.
Understanding Swiss pensions is a must for expats – so here’s a quick guide to some of the most important points.
How the Swiss state pension works for expats
Anyone over 20 years old living and working in Switzerland, including the self-employed, must pay compulsory social security contributions towards their state pension, known as AHV Switzerland or OASI – the Old Age and Survivor’s Insurance.
They are entitled to a state pension after contributing for 12 months.
The payment depends on two factors – the number of qualifying years of contributions and the expat’s average wage over the contributory period.
Benefits are paid between a year or two before reaching the official retirement age and up to five years after if the expat keeps on working.
The full pension is only paid if an expat has contributed every year since the age of 20 to their Swiss retirement age.
The current statutory retirement age is 65 for men and 64 for women.
Special pension rules for foreigners
How the pension is paid is covered by countries having bilateral social security agreements with Switzerland.
This is where Brexit may complicate the status of British expats in Switzerland on leaving the European Union.
Other countries outside Europe have bilateral agreements with Switzerland – including Australia, Bosnia and Herzegovina,Canada, Chile, Croatia, Israel, Japan, Macedonia, Montenegro, The Philippines, San Marino, Serbia, Turkey, Uruguay and theUSA.
In these countries, pension payments start when an expat reaches the Swiss retirement age and no compensation is paid out of the fund.
On leaving Switzerland, AHV contributions stop.
The AHV is not paid if an expats new home country has no bilateral agreement with Switzerland, even if they were paid a pension before moving.
Staking a state pension claim
To stake a claim for an AHV Switzerland payment, expats must write to the pension office where the last contribution was paid.
Retiring in Switzerland
Expats can retire in Switzerland if they have the money to live without claiming benefits and medical insurance, including cover for accidents.
Residence visas last five years.