Switzerland has one of the most sophisticated citizen’s insurance systems in the world, funded in part by employees and employers. The first and most important aspect of the state pension system in the country applies mostly to retirees, and people who are disabled.
The general aim here is to ensure that people who no longer work, those with disabilities, and people who are survivors can look after their basic financial needs, and do not fall under the poverty line.
In some cases, the monetary amounts secured from the otherwise applicable pension may not do enough good, in which case supplementary benefits are also provided.
Who Gets The Insurance
People who move to a country other than Switzerland, or don’t work in the country lose their mandatory insurance coverage.
The classes of people covered by this insurance in Switzerland include:
What Benefits Does The Insurance Provide?
Contributions To The First Pillar
The mode of finance for the first pillar Switzerland - Global Eye Switzerland is pay-as-you-go. This means all the people who are employed gainfully, and their employers are mandated to make contributions to the system. This pays for the pensions given to people who have retired.
Employers and employees usually pay 50% of the contributions, while people who are self-employed or not in gainful employment make the full contribution themselves.
The amount of the due compensation is calculated as a portion of the gross salary of the person.
When Do People Become Liable For Contributions
For people in gainful employment after the age that pension is provided to them, contributions are due if their income is more than CHF 1400 per month.
People over the age of 17, living in Switzerland and having gainful employment are due for making contributions.
People over the age of 20 become due for contributions if not in gainful employment.
Contributions By The Government
The cantons in the country and the confederation also make contributions to pillar 1 through leveling different types of taxes on the sale of products.
Nearing Retirement And Collection of Pensions
When reaching the age of retirement, people in Switzerland ought to register themselves with the concerned compensation center about 3 months in advance.