Some info about the 1st pillar ?

What is the 1st pillar (AHV/OASI) ?

The 1st pillar includes the AVS (old age and survivors' insurance) and the AI (disability insurance). It is compulsory and its purpose is to cover your basic needs (housing, food and insurance). At the end of each month, a portion of workers income goes to the AVS pension fund, which distributes pensions to retired people. This is why it is called a public provision.

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AVS pension

Isn't it frustrating to watch your hard-earned salary being truncated by all these social deductions, collected by institutions you barely know and with blurry specificities? On top, most of us spend our working lives paying contributions we conceptually understand will come in handy someday… But what for? And how much are we talking about? Are my contributions tied to what I will receive?
So many questions that one can ask. But one thing’s for sure! If you have contributed throughout your professional career, then when the day of retirement comes, the first pillar will support you. And if you haven't missed any years, it will support you quite comfortably!

Yes, that's what our website is all about! To answer as many questions as possible: When can I receive my AVS pension? What is called “a gap year”? What are the determining factors for the calculation of the AVS pension? Are there ways to improve or make up for years missing contributions?

It is important to be aware that the first pillar is more rigid than its two companions. It is the only one that cannot be corrected or modified as we wish.

If I were to give you just one piece of advice: understand how this social insurance works and check where you stand to its regards every 5 years! Why 5 years? Come and find out!

AHV/OASI contributions

In addition to the amount of AHV or IV pensions that one can receive, it is also useful to know how the first pillar is financed. This social system, based on the principle of solidarity, means that all the contributions paid by working people are centralized to finance the pensions of those currently retired. I can imagine how many unanswered questions remain, but you are right to ask yourself the following: Do you pay AHV if you are not in paid employment, like students? And what about people who have taken early retirement or parents on maternity leave? On which part of the salary are the OASI contributions deducted and what’s the rate?

But then you might also say: Why bother knowing all these details, as it's not a matter of choice? Quite simply: the more you understand how the Swiss system works, the better you will be able to identify its shortcomings and optimise your future retirement.

It's up to you!

The story of AVS and its mechanics

One Sunday (more than 70 years ago), a vote which changed the course of the Swiss social insurance landscape took place. On 6 July 1947, the people of Switzerland decided to create the Old Age and Survivors' Insurance (OASI). This date marks the creation of the first of the three pillars of the pension system. It would take more than 30 years for the two other pillars to be fully implemented as we know them today.

Despite minor changes, the first pillar has remained almost identical in operation and financing to the one we know today. Its objective: to ensure a living income, regardless of your situation. In order to guarantee this security for the entire Swiss population, the AVS draws most of its revenue from the salary contributions paid by employees and employers. But in addition to this, the old-age and survivors' insurance scheme can rely on other sources of income to meet its financial needs: contributions from people who are not in gainful employment, heavy taxes on gambling houses and on the sale of tobacco products, etc.

Unlike private and professional pension schemes, the AHV does not seek to build up capital for each insured person. As soon as the annual contributions are collected, the AHV is quick to pay them out to the pension recipients, in the same year. If the amount of contributions exceeds distributed pensions, then the AHV will build a buffer aiming at maintaining pensions’ level in the hardest years.

Last but not least, old-age and survivors' insurance is the only component that adjusts over the course of a lifetime. The higher the inflation in Switzerland, the higher are the pensions paid by the first pillar.

The story of AVS and its mechanics

Some info about the 1st pillar ?


What is the 1st pillar (AHV/OASI) ?

The 1st pillar includes the AVS (old age and survivors' insurance) and the AI (disability insurance). It is compulsory and its purpose is to cover your basic needs (housing, food and insurance). At the end of each month, a portion of workers income goes to the AVS pension fund, which distributes pensions to retired people. This is why it is called a public provision.



AVS pension

Isn't it frustrating to watch your hard-earned salary being truncated by all these social deductions, collected by institutions you barely know and with blurry specificities? On top, most of us spend our working lives paying contributions we conceptually understand will come in handy someday… But what for? And how much are we talking about? Are my contributions tied to what I will receive?
So many questions that one can ask. But one thing’s for sure! If you have contributed throughout your professional career, then when the day of retirement comes, the first pillar will support you. And if you haven't missed any years, it will support you quite comfortably!

Yes, that's what our website is all about! To answer as many questions as possible: When can I receive my AVS pension? What is called “a gap year”? What are the determining factors for the calculation of the AVS pension? Are there ways to improve or make up for years missing contributions?

It is important to be aware that the first pillar is more rigid than its two companions. It is the only one that cannot be corrected or modified as we wish.

If I were to give you just one piece of advice: understand how this social insurance works and check where you stand to its regards every 5 years! Why 5 years? Come and find out!



AHV/OASI contributions

In addition to the amount of AHV or IV pensions that one can receive, it is also useful to know how the first pillar is financed. This social system, based on the principle of solidarity, means that all the contributions paid by working people are centralized to finance the pensions of those currently retired. I can imagine how many unanswered questions remain, but you are right to ask yourself the following: Do you pay AHV if you are not in paid employment, like students? And what about people who have taken early retirement or parents on maternity leave? On which part of the salary are the OASI contributions deducted and what’s the rate?

But then you might also say: Why bother knowing all these details, as it's not a matter of choice? Quite simply: the more you understand how the Swiss system works, the better you will be able to identify its shortcomings and optimise your future retirement.

It's up to you!




The story of AVS and its mechanics

One Sunday (more than 70 years ago), a vote which changed the course of the Swiss social insurance landscape took place. On 6 July 1947, the people of Switzerland decided to create the Old Age and Survivors' Insurance (OASI). This date marks the creation of the first of the three pillars of the pension system. It would take more than 30 years for the two other pillars to be fully implemented as we know them today.

Despite minor changes, the first pillar has remained almost identical in operation and financing to the one we know today. Its objective: to ensure a living income, regardless of your situation. In order to guarantee this security for the entire Swiss population, the AVS draws most of its revenue from the salary contributions paid by employees and employers. But in addition to this, the old-age and survivors' insurance scheme can rely on other sources of income to meet its financial needs: contributions from people who are not in gainful employment, heavy taxes on gambling houses and on the sale of tobacco products, etc.

Unlike private and professional pension schemes, the AHV does not seek to build up capital for each insured person. As soon as the annual contributions are collected, the AHV is quick to pay them out to the pension recipients, in the same year. If the amount of contributions exceeds distributed pensions, then the AHV will build a buffer aiming at maintaining pensions’ level in the hardest years.

Last but not least, old-age and survivors' insurance is the only component that adjusts over the course of a lifetime. The higher the inflation in Switzerland, the higher are the pensions paid by the first pillar.

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