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The Swiss Social Insurance System

The Swiss social insurance system is based on three pillars.

The first pillar is made up of the state insurance:

  • AVS (old-age and widower’s pension to which even non-Swiss citizens are entitled to. The pension is calculated according to the number of years contributed and the average level of salary);
  • AI (disability insurance), 
  • APG (loss of earning capacity benefit),
  • AC (unemployment insurance)
  • AMat (maternity insurance)

The second pillar is the pension fund professional insurance plans legislated by the Loi sur la prévoyance professionnelle called LPP. It is complementary to the first pillar. It gives the right to a pension at the age of retirement and includes a pension for widowers. The monthly contribution paid by the employee depends on the employer’s pension fund scheme. It is a capitalization system. The pension fund portfolio (combination of both employer’s and employee’s contributions) follow the employee in case of departure (even abroad).

The third pillar is not compulsory. It is an individual insurance that gives direct benefits (tax return) and differed benefits (increase of invested capital on investment funds).

For more information on social insurances

Deductions taken on gross salary at the Institute (each month)

AVS/AI/APG* 5.05 %
AC 1 %
AMat 0.02 %
Accident Insurance ** 0.75 %
APG *** 0.4 %
Tax at source ****  

 

* If a person has paid AVS for a minimum of 12 months and lives outside Switzerland at the age of retirement (64 for women and 65 for men), the Central Compensation Office or the local social insurance institution must be contacted in order to examine his right to a Swiss old-age pension. EU, USA/Canada residents have the right to a pension. For other countries not having social agreement with Switzerland, reimbursement of the contribution is made.

** Institute’s employees are covered against accidents of professional and non-professional nature. Only the non-professional part is deducted from the salary.

*** Insurance that guarantees payment of the person’s salary in case of a long-term sickness (maximum period of two years).

**** Rate varies (depending on gross salary, number of months paid during the year and civil status. Swiss citizens, C and B hors-contingents permit holders are exempted).

Children allowance

200 CHF is paid by the Canton of Geneva for children aged below 16 whose parents work in the canton. The monthly allowance increases to 250 CHF for children aged between 16 and 25, provided they are studying.