AHV (OASI) average salary calculation when non-employed

Banks, Insurances & Third Pillar
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If you’re non-employed, have no income (no pensions, no salary) other than dividends which don’t count for AHV, and you pay the 0.2-0.3% wealth-based contributions to AHV (OASI), for example paying 3922 CHF per year for 1.85M in assets as per the table on page 8 in this PDF: https://www.ahv-iv.ch/p/2.03.e

When you get over the age of 65, your monthly pillar 1 pension is computed based on amount of contributions years (out of 44 years), and your average salary. The average salary must be something like 90k/year (probably a lot higher by the the time I’d reach 65 due to inflation) over those 44 years to reach the maximum.

So the question is: do your non-employed non-salary-based contributions count in any way as a salary for this average salary? And if so, what exactly is the formula of converting your contributions (e.g. 3922 CHF/year in this example) to the salary this represents for this year (e.g. is it the contributions divided through 10.6% or through 5.3%)?

All the information I find online about this (official documents like the above PDF, blog posts like this one: https://www.mustachianpost.com/oasi-contributions-early-retirement-fire/, etc…) only ever talk about the amount you have to contribute, and the 44 contribution years and gaps in them, but not about the average salary

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Yes, they do, they get converted into a notional salary for the purposes of calculating your contribution. I wrote a post on it here or on swissforum but I can’t remember which thread it was in.

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PDF (page 28 and following)

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Don’t count on it. The “Aufwertungsfaktor” hasn’t changed since 1986. It’s not directly coupled to the inflation. And I’m not aware that inflation is applied in another way to calculate the AHV pension.

And the amount you add to your accumulated capital based on received gross salaries is roughly 9 times of what you pay in non-employed contributions. The table is in the pdf link mentioned above.

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To get maximum AHV, your average salary has to be above a certain threshold. I thought this number has been increasing.

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Correct. The maximum coordinated salary is raised every now and then. It’s gone up by nearly 4000 francs since 2010.

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Yes, the threshold is derived from the maximum AHV pension rate in the current year, which influences several other values. E.g. 3a pillar yearly contribution amount.
But this rate impacts only the threshold value, and not the value of accumulated gross salaries. The latter is impacted by other factors like kids and taking care of your elders. And if the received salaries need to be increased due to inflation, afaik.

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I’m not sure I understand what @capmac and @Daniel are trying to say. But let me give an example.

Let’s say your accumulated contributions give an average salary of 85k and let’s assume that this is enough to give maximum AHV payout - let’s set this at 80k. Let’s also simplify and say that you have zero additional contributions until retirement.

If the maximum AHV payout limit is increased to 90k, then it would mean you no longer get 100% AHV, but 85/90 of AHV (and further apportionment for years/44).

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The new thresholds effectively only apply for future contribution years, though, as contributions from older years are uplifted together with the threshold adjustment. E.g., if the threshold increases from 60k to 120k over your life from 20 to 65, and your salary matched this exactly each year (starting salary 60k, final salary before retirement 120k), you get the maximum AHV. This uplifting should be the same for salary- and wealth-based contributions.
The above is not correct. There is an uplifting factor but it’s applied to the income sum, not individual years, and may be very low if the salary index outpaces the AHV pension index (as has been the case over the last 40 years).

Also, the AHV benefit calculation is not linear. With 85/90 (94.4%), you still get 97.6% of the maximum AHV benefit.

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That would be better, but from:

I interpreted that as saying the accumulated is not uplifted.

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Only the current threshold from the year of retirement is relevant for the calculation of the AHV pension. Previous thresholds are not relevant for the calculation.

To get the maximum AHV pension your salary average needs to be larger than maximum AHV pension * 35.4 + 1, not including kids, etc. factors.

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Hm, 3.01 mentions ‘Aufwertungsfaktoren’. However, it seems it’s a flat adjustment based on the first AHV year, not uplifting of individual years. And despite the claim “Deshalb wird die Einkommenssumme entsprechend der durchschnittlichen Lohn- und Preisentwicklung […] aufgewertet.”, the uplifting seems tiny, much less than I would expect from the usual mix index. 3.5% for someone who was 21 in 1982 and now retiring.

Art. 51bis AHVV:

I suppose that the additional factor 1.1 results in this uplifting to be muted. Offers some relief in case of large discrepancies but no full uplifting.

Edit: It’s not just that factor 1.1. As salaries have been rising faster than AHV pensions, less uplifting is applied.

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Weird. the site doesn’t work.

I think no one answerd Zorro. What he want to know if what that 3922CHF he’s paying correspond as a salary.

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It’s in the table in the PDF. about 37k.

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Well I can’t reach the site. Not even https://sozialversicherungen.admin.ch/

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I once calculated that at my then current salary I would reach the maximum required for 88.2k average by the time I am 50. Of course that 88.2k will rise, but so will my salary over the years until then, and I will still pay in either through part time work (which I am considering) or wealth based after 50. So that will cover easily any increase above the 88.2k. The increase I would also not expect to increase hugely. Maybe to 100k by the time I am 65.

I just calculated and I would need on average a salary of 35k a year to get to 100k. Though redoing the full calculation with my new salary, I’d already hit the 100k average at 50.

In short, I think anyone with sufficient funds to retire early in Switzerland shouldn’t need to worry to hit the maximum AHV in terms of average salary contributions. Years contributed is of course a different matter. Yes, not everyone has my salary (though having seen the salary thread on here there’s plenty with a lot higher, too), but the contributions once retired early do matter a lot.

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Perfect, thanks! So the fictional income corresponds to 1 / 0.106 of the paid contributions (so based on 10.6%)

I meant the required average salary is probably a lot higher in a couple of decades, which makes it harder, not easier :slight_smile: I also saw the table you mentioned and indeed, that one is not following the inflation at all, every factor in 1986 and every year after being ‘1’.