Partial 1st pillar pension

Banks, Insurances & Third Pillar
1

Hello Mustachians,

I was wondering what are the requirements to be entitled to the 1st pillar (AHV) Pension. I found somewhere information that basically one needs to work and pay AHV taxes for one year and then for each year that we work and pay taxes we will receive 1/44 of the pension at retirement age (65 for men, 64 for women). I wonder if somebody has more information and can confirm this and what amounts we’re talking about here. Even if it’s silly money, I’d like to estimate my future pension. Maybe it could allow me FIRE earlier.

PS. I’ve read also that maximum pension for married couple is 3500 chf a month. So assuming I’m entitled to max, I’d get 3500/44=79 chf a month for each year I worked in Switzerland.

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2

As your income isn’t the the limiting factor (>85k), it’s really basically just the amount of years / 44 x 3555 CHF.

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3

To my knowledge, & I have read quite a few ahv brochures etc, your understanding is correct.

I definitely include it as an income at >65 when doing income/expenses calculations. Ok, maybe I will increase to >67 cos it’s looking that way sooner or later.

PS we don’t call the AHV deduction a “tax”, it’s a “beitrag” or shall we say “contribution”. :wink:

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4

The level of your AHV depends on two factors:

  • number of years worked in CH
  • total income over those years in CH

You get the “full” pension if you have:

  • worked 44 year
  • AND have an average salary of 85’320 CHF over all those 44 years

If you have earned less, then the AHV will be less. However there is a lower bound at an average of 14’220 CHF.

This means: The lower bound is 44x14’220 = 625’680 CHF, and the upper bound is 3’754’080 CHF
If over all the years working in CH, you have earned less than 625k in total, you will get the miniumal amount. Only if you have earned a total of 3.7M or more, you will get the maximum amount. For everything in between, the AHV will also be somewhere between 28’440 and 42’660 a year (edit: for a married couple).
And, as Cortana has mentioned, this will be multiplied by ((X years worked in CH) / 44).

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5

Thanks guys. That’s great news. In Poland this couple of hundreds of CHF will actually make a difference as it can cover bills for example. I need to update my spreadsheets now. :slight_smile:

6

If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.

7

I wouldn‘t count too much on that… many things can happen in 20-30 years.
Poland leaving the EU for introducing some kind of regulation for foreign pensions, or the AHV being bound to residency in CH.

When you are 10 years from 65, I‘d include it in my spreadsheets, but before that I would never rely ob it. Especially if you don‘t plan on staying in the country.

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8

That’s true. Much can happen in the meantime. Hopefully, the future will be reasonable and stable enough to let us enjoy our retirement funds.