The three-pillar system in Switzerland is quite unique in its construction.
Switzerland has a close-knit network of different types of social insurance, offering the persons living and working there, and their family, a broad protection against risks whose financial consequences could not be covered without an insurance.
The Swiss social security system is divided into five areas:
- retirement, survivors’ and invalidity insurance (three-pillar system)
- protection against the consequences of illness and accidents
- income compensation allowances in case of military service and maternity
- unemployment insurance
- family allowances
These different types of insurance offer protection in the form of pensions, unemployment benefits and family allowances, as well as paying for costs incurred through illness and accidents.
The benefits paid out by the different types of social security are in principle financed by contributions levied on income. For the health insurance, each person insured pays a premium. The Confederation and the Cantons contribute with different amounts to the social security fund of the basic pension and invalidity insurance or finance them either in toto (supplementary benefits) or by subsidising premiums for persons with very low incomes (reduced premiums for health insurance).
Below is an overview of the three-pillar system:
Let’s introduce the three-pillar system: state pension, work pension, private pension.
The ideal approach is to start thinking about this topic as early as possible.