Switzerland's Second Pillar

The true measure of a developed economy lies not in the number of skyscrapers in a country’s  capital but rather the way a state treats its citizens, regardless of what their contribution to the central economic system is.

What is the Second Pillar?

The basic personal insurance system in Switzerland relies on three main pillars, each of which pertains to an exclusive and important aspect of personal protection, especially after a source of income is lost.

The second pillar in Switzerland is geared towards delivering an occupational assurance and the law provides for the lowest requirements for benefits.

The pension system in the country is fairly complicated, hence weighing up the options can be time consuming.

Second Pillar and employment status

People who work and earn more than a stipulated amount have to be insured through the second pillar, and the scheme is also going to automatically cover disability and death after the person becomes 17.

On the other hand, retirement benefits will become included once the age of 24 is crossed.

For people who earn less than this, insurance coverage through the second pillar can be made available when employers agree to make contributions as well.

People who are running a business and therefore do not have a supervisory employer can also contribute and become part of the system.

People who are unemployed can qualify for certain benefits through the second pillar in the case of disability or death.

Pension funds

According to the Federal Constitution, the basic aim of the first and second pillar systems is to enable people to sustain a good lifestyle after retiring or losing the steady source of income.

The organisation of the pension funds use the contributions collected to invest, although this can be done in items that have been mandated by the government, and include shares, bonds, and property.

Pension funds in Switzerland are typically allowed to be used towards buying a house for the retirement, or to leave the country. 

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