Maximum AHV pension: That's what counts
The majority of people who are insured under AHV and who pay contributions are not entitled to the maximum AHV pension. Find out what factors influence your pension amount and how; under certain circumstances, it might still be possible to receive the maximum pension despite having AHV contribution gaps.
Requirements for receiving a maximum AHV pension
The maximum AHV pension in Switzerland is currently CHF 2,450 per month for an individual and CHF 3,675 per month for married couples. The following requirements must be met in order for the maximum AHV pension to be paid out:
- No AHV contribution gaps
- Average annual income of at least CHF 88,200 (adjusted for inflation)
Maximum and minimum AHV pension per month:
| Minimum: | CHF 1,225 |
| Maximum: | CHF 2,450 |
| Maximum (married couple): | CHF 3,675 |
There is an AHV ceiling for married couples. The combined pension paid to a married couple may not exceed 150% of the maximum pension payable to an individual. The two pensions are reduced proportionately and paid out separately.
Maximum contribution years for the full AHV pension
Only those who pay AHV contributions are entitled to a pension. For gainfully employed persons in Switzerland, the obligation to pay AHV contributions begins on January 1 of the year following their 17th birthday. Salaried employees have AHV contributions deducted from their income, and self-employed persons are required to pay the contributions directly to the AHV compensation office. Individuals who are not gainfully employed – students, for instance – are required to start making contributions no later than January 1 of the year following their 20th birthday.
AHV contribution gaps are not permitted from this point onward. Contribution gaps will nullify the entitlement to a full pension; only a partial benefit will be paid out. Based on the system as it is today, this means that women are required to pay in to the AHV for 43 years and men are required to pay in for 44 years. Individuals who are not gainfully employed must also pay in contributions during this period. The minimum contribution is currently CHF 514 per year. Married individuals who are not gainfully employed are insured through their spouses from the time they get married, on the condition that the spouse contributes at least twice the minimum contribution toward the AHV.
Contribution gaps reduce the AHV pension
If contributions are not paid regularly into the AHV, contribution gaps are created. For each year in which no contributions were made, the pension entitlement is reduced by 1/44. The most common reasons for AHV contribution gaps are:
- Time spent living outside of Switzerland
- Studies
- Lots of short-term jobs with different employers
- Divorce affecting individuals without gainful employment who then fail to make the minimum AHV contributions from that point on
- Spouse's retirement
- Employer's failure to forward AHV contributions
Full AHV pension despite contribution gaps
Under certain circumstances, it is still possible to receive the maximum pension even if there are AHV contribution gaps. Firstly, you have five years from the time a gap has been created to make up for missing contribution years. However, this means that the gaps need to be detected in good time. An AHV extract can be requested from the compensation office for this purpose.
Secondly, it is possible to offset missing contribution years. For instance, someone who completed an apprenticeship in Switzerland and, as a result, already paid in AHV contributions before the generally applicable contribution obligation took effect can have these contributing "youth years" offset against their contribution balance. Exemptions are also granted for contribution gaps created before 1979.
The AHV pension amount depends on income
The AHV pension amount is based not only on contribution years but also on income, with the maximum pension permitted by law being no more than twice the minimum pension amount. People whose average annual income across all contribution years was at least CHF 88,200 are entitled to the maximum AHV full pension. However, this amount is based on inflation-adjusted income that is extrapolated using what is known as the revaluation factor.
Mothers and fathers also benefit from parenting credits for the years in which their children were under the age of 16. These are added to the income. This gives parents the opportunity to achieve the income required in order to receive the maximum pension even if they have to temporarily reduce their level of employment. People who have acted as a caretaker for relatives prior to retirement can also have care credits offset against their contribution balance. Parenting credits and care credits are the equivalent of three times the annual minimum pension.
Improve retirement pension through voluntary pension provision
If contribution years have still not been made up by retirement age or if the average annual income is not high enough for entitlement to the maximum AHV pension, there are ways to offset this situation. Voluntary private pension provision via Pillar 3a is one key option. This solution also allows gainfully employed persons who are on a low income to save retirement capital. Employees who are insured with a pension fund also have the option to buy into the second-pillar employee benefits insurance on a voluntary basis in order to increase their pension from the pension fund.
It is also possible to increase the AHV pension amount by delaying the pension start date. In Switzerland, the pension start date can be postponed by a minimum of one year and a maximum of five years. Anyone wishing to postpone their retirement pension must inform the relevant compensation office within one year of reaching the statutory retirement age.
