First pillar: the AVS. In most cases with this annuity it is not possible to guarantee the vital minimum. In this case, you can request supplementary benefits. The AVS is organized by the state.
Second pillar: the occupational pension. Here we are talking about the money you pay as contributions to your pension fund. As an employee you are automatically insured starting from a certain annual income. Together with the AHV pension, the pension fund annuity allows you to cover around 60% of your last income. Responsibility for occupational benefits lies with your employer.
Third pillar: private pension. This form of pension is optional. You decide whether you want to pay contributions to the third pillar or not. You have the two options described below:
- Restricted 3a pension: in the ideal case you pay your contributions regularly, but you will only be able to access them in old age. On the other hand, you can deduct the contributions paid from the taxable income.
- Free 3b retirement provision: this includes, for example, your own apartment or house, debt securities or life insurance. You can terminate the 3b contract or have the accrued capital liquidated at any time.
After your retirement, you will receive a monthly pension from the first and second pillars, the amount of which will however be sufficient to cover only part of your previous income. And the amount of these annuities tends to decrease. This is why 3a retirement planning is becoming increasingly important. Many people have paid contributions to this form of private pension for decades to be able to finance their usual lifestyle even in old age. With the money from all three pillars this goal can be achieved.