Taking normal retirement. What you need to do.
You have reached normal retirement age and want to start your well-earned retirement. Find out what steps you need to take for normal retirement, and what points you need to bear in mind.
Starting retirement: Officially ending your employment relationship
Employed persons can start normal retirement as soon as they reach AHV retirement age. Many people assume their employment relationship ends automatically – but that isn't the case. You need to end your employment relationship officially by giving notice of termination, or via a contractual agreement. This normally takes effect at the end of the month in which you have your 64th or 65th birthday. Your pension will be paid out the following month for the first time.
Pillar 1 pensions: Applying for your AHV pension
AHV is the mandatory social insurance system. It secures a minimum standard of living upon retirement and in the event of disability or death. You should notify the compensation office that you wish to draw your AHV pension three to six months before starting retirement. This will ensure there are no delays in payment. Application forms are available online, or from your local AHV compensation office.
The amount of retirement pension you receive will be calculated based on your contribution period and income level. If you have a full contribution period, i.e. you have paid all your AHV contributions from age 21 until normal retirement age, you will receive a full AHV pension. As of 2020, the full pension is a minimum of CHF 1,185 and a maximum of CHF 2,370 per month.
Only a partial pension will be paid out if you do not have a full contribution period. The greater the contribution gap, the lower the partial pension. Spouses who are both in retirement cannot receive more than 150% of the maximum pension for single persons – that is, a maximum of CHF 3,555 per month.
Pillar 2 pensions: Choose how to withdraw your BVG pension
The minimum requirements for employee benefits insurance from a pension fund are governed by the Federal Act on Occupational Retirement, Survivors' and Disability Pension Plans (BVG). Together, Pillars 1 and 2 cover at least 60% of your final salary – enabling you to maintain your accustomed standard of living. The BVG allows pension funds to set a normal retirement age that differs from the AHV retirement age – for example, some pension funds have raised the retirement age for women to 65 years.
Some pension funds contact insured or their employer a few months before retirement age so they can make arrangements for the payment of the pension. Other pension funds expect the employer to notify them that their employee is retiring. If you have any questions, please contact your pension fund.
You should start thinking well in advance about whether you would like to receive your retirement assets from the pension fund in the form of a pension or lump sum. To determine your BVG retirement pension, the assets you have accrued are converted into a fixed annual retirement pension based on a conversion rate. If you opt for a cash payment, you must notify your pension fund up to three years before your earliest possible retirement age, depending on your pension fund's regulations.
Pillar 3 pensions: Drawing your private pension
The third pillar covers private pension provision and is voluntary. It enables you to build up an additional financial cushion for retirement. In addition, private pension provision is the ideal way to systematically close any pension gaps. It consists of tied pension provision (Pillar 3a) and flexible pension provision (Pillar 3b). A normal payout is possible at the earliest five years before you reach AHV retirement age and at the latest at the end of the month in which you begin drawing your AHV pension. For more information, contact the bank or insurance provider with which you opened your third pillar account.
Your Pillar 3a account or safekeeping account must be withdrawn as a lump sum in one go, when it will be subject to a tax on lump-sum payments. It may be advantageous to hold multiple Pillar 3a accounts and to spread your withdrawals over different tax years.