{{item.videoDuration}}
{{item.title}}
{{item.text}}
{{item.videoDuration}}
{{item.title}}
{{item.text}}
The fourth pillar: your foresightedness as an employer
The Swiss social security system is unique – and highly complex. Handling social security in Switzerland in a legally compliant manner presents you as an employer with many obligations and even more tasks. It involves risks that could cost your company dearly if you do not address them appropriately. Through our proven social security advice, highly qualified experts and many years of experience advising employers, we can help you reduce complexity around this topic, avoid risks and use your resources efficiently.
The Swiss social security three-pillar concept
The Swiss social security system covering the risks of old age, death and disability is built on three pillars. Pillars 1 and 2 both directly affect your HR administration. The relevant authorities set out legal stipulations, require compliance with various provisions and give you a pile of administrative work to complete.
We support you with our services
Dialogue with authorities and insurers in Switzerland can be arduous and time-consuming. That's why we give you advice on social security through a range of services. You can rely on our advice and energetic support on the following issues:
- questions on the obligation to pay contributions and on payroll
- processing of insurance benefits
- preparing and supporting AHV (old age social insurance) and UVG (accident insurance) audits
- training employees in your HR department
- administrative work
- choosing the appropriate insurance solution (compulsory and voluntary)
- clarifying social security obligations, particularly in an international context
- registering and processing ‘ANobAGs’ (employees whose employer is not obliged to make contributions)
Contributions and benefits
Learn more
Family allowances
Learn more
Key figures for social insurance in 2023
Learn more
Information about social security
General part of the law governing social insurance (ATSG)
An unemployed person has an accident – who will pay for treatment: the unemployment insurance or the accident insurance? Later on in hospital, the same person also falls ill – who is to pay now?
The General Part of the Law Governing Social Insurance (ATSG) effective 1 January 2003 was introduced in order to coordinate the individual parts of the law on social insurance and with answers to as many questions as possible.
The General Part defines principles and terminology, lays down procedures and administration of justice and determines the institutes under social insurance law. Moreover, it determines which branch of social insurance is obliged to pay in advance in the case of ambiguity, which benefits can be reduced and to what extent in the case of accumulating claims, and to what extent recourse can be taken against third parties.
The individual branches of social insurance – except for the occupational benefit plan – are in principle based on the provisions in the ATSG. However, individual provisions may contain exceptions which have to be expressly included in the relevant section of the law. The addition of «in deviation to Art. Xyz, ATSG» will be familiar to the frequent user.
Old-age and Survivors’ Insurance (OASI/AHV)
The OASI is the mandatory pension insurance scheme in Switzerland. Together with the Disability Insurance and the Supplementary Benefits, it forms the 1st pillar of the pension scheme under Swiss federal law, and serves to secure adequate livelihood for individuals. It therefore has the characteristics of a mutual assistance enterprise.
Pensions are paid out to women from the age of 64 and to men from the age of 65. OASI pensions can also be received from an earlier age onwards, however only under certain terms and conditions, and at a reduced rate. Receiving OASI pensions can be deferred for up to five years. Depending on the duration of the deferment, a supplement is added to the pension. Widows and widowers will receive a survivor’s pension if they share their home with underage children or children still in education.
The OASI presents a number of challenges to companies, notably in the following areas:
- Responsibilities and liabilities of the employer
- Consideration of all salary components subject to the OASI (see «Guidelines for the salary components subject to OASI, DI and EO contributions (WML)»)
- Disclosure and alignment of payroll and financial accounting in preparation for an audit
International insurance obligations - Documents supporting social insurance coverage in the case of international postings and secondments (Certificate of Coverage A1 or E101, continuation of OASI)
- Duty of notification with regard to the obligation to pay OASI contributions when leaving or in the case of long-term illness.
- Applying the simplified procedure
- Contributing obligations of self-employed persons (SE)
- Contributing obligations of non-working persons (NW)
- Optional insurance
For the guidelines concerning the mandatory OASI/DI insurance issued by the Federal Social Insurance Office, follow this Link.
For further information on the OASI, click here.
Disability Insurance (DI)
The DI is a mandatory federal social insurance scheme and part of the 1st pillar. With measures to either reintegrate individuals into the labour market or support them with benefit payments, it aims to secure livelihood for people who have become disabled as a result of illness or an accident. The legal basis for this is laid down in the Federal Law on Disability Insurance (IVG), which in turn is based on art. 111 and 112 of the federal constitution.
As employer, you will have to deal with disability insurance in the following instances:
- Obligation to cooperate in the form of a notification of early detection when an employee has been absent for four weeks
- Filling in questionnaires for DI claims
- Reintegration measures
For detailed information on the DI, follow this link (n/a in English).
Fund for loss of earnings, maternity and paternity benefits (MSE/VSE) and the future carer’s allowance
The EO fund pays compensation for loss of earnings to people active in the military, civil defence, and other civilian services. The insurance was introduced during the Second World War, when it was called «soldier’s protection». Payments are based on the individual’s income. Since 1 January 2015, EO payments have only been made up to retirement age. On 1 July 2005, the EO was expanded to include maternity benefits (MSE) for working women; two weeks of paternity leave were added to the scheme, with effect from 1 January 2021.
As an employer you have the following obligations in relation to EO, MSE and VSE:
- Making continued salary and benefits payments during pregnancy, maternity and paternity leave – leave can be taken as a block of time or as individual days
- From 1 July 2021, paying a carer’s allowance to employees with children who have a severe disability as a result of an illness or accident
- Complying with the special conditions under labour law for pregnant and breastfeeding mothers
- Accurately recording absences during military service, other civilian services, and other cases eligible for EO benefit payments
Compensation is also paid for loss of earnings linked to COVID-19. Although the scheme is based on the EO benefits, it is actually paid by the compensation offices.
Our social security consultants can explain how the EO will affect your company. You can find more information about the EO here (only available in French, German, and Italian).
Supplementary benefits (EL)
Supplementary benefits (EL) are an additional facility to the OASI and the DI and help fill gaps if pension and income can’t cover the minimum cost of living. As needs-related benefits, EL have a legal basis and do not constitute care or social welfare. Together with the OASI and the DI, they are part of the social groundwork of the Swiss pension system.
Read more about the EL here.
Occupational benefit plan (BV)
The occupational benefit plan is the 2nd pillar of the Swiss pension system. It aims to allow individuals to continue an adequate livelihood upon retirement. Under the LOB (Law on Occupational Benefits), retired employees receive a guideline value of approximately 60 % of their most recent salary from the 1st and 2nd pillars, up to an income of approx. CHF 85'000 p/a. The LOB also insures against death and disability.
Your key tasks as an employer in this respect are:
- Choosing the appropriate combination of structure, risk carrier and financing model when selecting a pension fund
- Selecting representatives for both the employer and the employee side
- Correct processing of insured salaries according to the benefit plan – often also for regular benefits that aren’t part of the basic salary.
- Adherence to entry thresholds for certain employment contracts (part-time employees, hourly wage earners)
- Procedures in the case of long-term illnesses, unpaid leave and similar situations
- Detecting the situation of a partial liquidation, such as in the case of mass redundancies
In terms of the LOB (Law on Occupational Benefits), these explanations issued by the Federal Social Insurance Office will be of help.
Companies’ pension fund solutions are often higher than what is stipulated by the LOB, which means the companies are responsible for implementing their individual schemes correctly.
Unemployment insurance (UI)
If a person becomes partially or fully unemployed, they are entitled to a daily jobseeker’s allowance. UI covers both insured employees and persons entering the labour market for the first time. They need to have completed the mandatory years of education and may neither have reached the OASI pension age nor receive an OASI pension.
Self-employed and non-working persons are not insured under the UI. Likewise, employed persons who are associates or shareholders of a public liability company or a limited liability company and thus in a position to influence the decisions of that company, are also not entitled to UI benefits.
As employer, you may expect the following tasks in the context of the UI:
- Completing an interim earnings certificate for the UI
- Defining terms and conditions and correctly processing short-term work
- Correctly processing bad weather compensation
- Conducting mass redundancies and evaluating a partial liquidation of the pension fund
Providing correct information with regard to the amount of unemployment benefits paid to employees who have become fully unemployed and live abroad.
For more information on the UI, consult the OASI Information Office or the RAV job centre.
Family allowances (FamZG)
Since 2009, the federal law on family allowances (FamZG) sets the (national) framework for cantonal legislation. Family allowances are intended to at least partially cover the costs of raising children. They include child and education allowances, as well as birth and adoption allowances of certain cantons. Families in agricultural businesses continue to benefit from the special law on family allowances in agriculture (FLG).
As employer, the FamZG will be relevant in the following measures:
- Correct payment of family allowances, in particular also the additional amounts to cover differences in domestic and international allowances
- Knowing the requirements for entitlement, and processing payments for irregular workers or part-time employees
- Correct processing of long-term absences and unpaid leave of insured employees with children
Click here to consult the guidelines for the federal law on family allowances.
The guidelines on family allowances have been adjusted and can be found under «Laws & Regulations».
Cantonal contributions and deductions
In addition to the overview of family allowances, other cantonal deductions and contributions can be seen in table 2 of the prevailing version of «Arten und Ansätze der Familienzulagen» provided by the Swiss Federal Social Insurance Office.
Accident insurance (AI)
All employed persons in Switzerland are compulsorily insured against accidents and occupational illnesses. The law on accident insurance and occupational illnesses protects individuals from the consequences of occupational accidents, occupational illnesses and accidents outside of work; it covers payments for medical treatment and provides for financial support. The cover for accidents outside of work, such as leisure activities and commuting, applies to persons who work for the same employer for at least 8 hours per week. The insurance premiums for occupational accidents and illnesses (BU) are borne by the employer. For all non-work-related accidents (NBU), the law stipulates that this is borne by the employee. However, in practice in certain industries, it is often also borne by the employer. Employers owe the entire premium under AI law, and will therefore deduct the employee’s contribution from their salary. The premiums are based on the income of the insured individual and on the type of company they work for.
For questions concerning the AI law, these explanations by the Federal Office of Public Health will be of help.
Social health insurance (KV)
Social health insurance gives everyone living in Switzerland access to adequate health care and covers the financial cost of illness, accident and maternity. Insured persons can also take out a health insurance policy covering additional treatments. Employed persons can exclude the part covering accidents in their health insurance policy as this is already covered by their insurance with the employer.
Under the Social Health Insurance Law, employees and their families sent on secondments abroad remain insured for up to six years. However, an additional obligation to be insured can arise in the host country if such country does not consider the coverage to be adequate.
As employer, you are concerned with social health insurance aspects as follows:
- Notifying optimisation potential in terms of health insurance for cross-border workers and their non-working family members
- Insurance coverage for postings and secondments abroad
More information on compulsory health insurance can be found here.
Accident insurance and occupational safety
Suva has been appointed to fulfil the role of implementing and supervising occupational safety (prevention measures) in individual companies as an independent organisation under public law. At the beginning, Suva’s incorporation was strongly opposed by private insurance companies. Today, it is clearly laid down in the law who needs to be insured by Suva (Art. 66 AI law), such as all companies in the construction industry, in machinery and in transport.
Companies which do not come under this article are free to choose their insurance company. There is a very broad selection of insurance companies, which is why we recommend using a holistic approach when considering the range of services available. Only this way you will be able to offer your employees adequate insurance cover.
Your tasks under the accident insurance law are as follows:
- Choosing a suitable insurance, especially with regard to insurance cover that exceeds the mandatory minimum
- Accident prevention measures
- Notification of claims to the insurance company(ies)
- Correct processing of continued salary payments for short-term and long-term claims, in particular in the case of gross negligence or personal negligence and self-inflicted injuryd
- Insurance coverage for secondments abroad
- Insurance coverage for foreign secondees coming to Switzerland
- AI law coverage after an employee has left the company, in particular if that person is abroad
- AI law coverage for unpaid leave, unemployment and disability
Find helpful information here:
- Information issued by the Federal Office of Public Health on accident insurance
- Information issued by Suva on Occupational accident insurance and Non-occupational accident insurance
Sickness allowance (KTG)
The daily sickness allowance insurance is optional. It ensures that employees continues to receive their salary if they have fallen ill and cannot work for a longer period of time, until they have recovered or receive a disability pension. A sickness allowance insurance relieves the employer from having to pay the full salary until the legal (statutory) period has lapsed. However, this only applies if the insured benefits are at least equivalent to the normal salary. The premiums vary, depending on the waiting period in the contract. Some collective labour agreements have very short waiting periods.
As employer, you are faced with the following challenges in the context of sickness allowances:
- Choosing the right insurance and best-suited waiting period
- Notifying claims to the insurer(s)
- Correct processing of continued salary payment for short-term and long-term cases
- Insurance coverage for postings abroad
- Sickness allowance coverage after an employee has left the company, in particular if that person is abroad
- Sickness allowance coverage for unpaid leave and unemployment
- Preparing an employment contract or personnel regulations in the case of refusal by the insurance
Please find more information in this context by clicking here.
Military insurance (MI)
Military insurance has been managed by Suva since 1 July 2005. Its financing is via the public sector, which means premiums are not dependent on the individual’s salary. Military insurance is for persons serving in the army, civil defence or civil service.
3rd pillar (a and b)
The 3rd pillar of the three-pillar principle consists of an individual’s own savings measures. Pillar 3a (linked savings plan) offers an additional possibility to put a certain amount aside free of tax, besides the compulsory amounts of the OASI and pension fund. Free of tax in this context means the savings contribution can be deducted from the taxable income, and neither the assets themselves nor any yields resulting from them have to be disclosed in the tax return. The criteria for withdrawing cash from that savings amount are similar to those for the pension fund.
Pillar 3b offers a more flexible savings potential in the context of optional pension plans, as this money can be accessed at any time (subject to the contractual terms and conditions with the relevant financial institute).
International
Employees who work for their company from abroad on a temporary basis are covered by the Swiss social insurance laws during that period. For this to apply, certain conditions must be met.
As employer, you should verify the following aspects when sending employees abroad:
- Nationality (in order to use the correct agreement)
- Country of origin (for salary aspects)
- Host country (for any additional salary aspects to be considered)
- Permit (for entry and work permission in the host country)
- Social insurance and tax situation (for the correct settlement)
- Structure of contract
We would be pleased to support you with our expertise, in particular in the case of international work relationships. The complexity of settlement obligations and insurance coverage should never be underestimated.
The following information and tools will support you when striving to manage international postings and secondments correctly:
- Social insurance obligation for secondments: Explanations by the Federal Social Insurance Office
- Social security for secondees between Switzerland and EU/EFTA countries, countries with which Switzerland has concluded an agreement on social insurance, and countries with which Switzerland does not have an agreement on social insurance: Documents and information sheets
- Switzerland’s social insurance agreements: Overview
- Current regulations on social insurance agreements between Switzerland and the EU or the EFTA: EFTA: Regulation (EC) no. 883/2004, Regulation (EC) no. 987/2009 and Regulation (EC) no. 465/2012 also for Switzerland, for relations with EU states since 1 January 2015, and for relations with EFTA states since 1 January 2016
- Law on international postings and secondments (EntsG): Legal text
- Postings and secondments to Switzerland: Information issued by the Federal Administration
- Postings and secondments of employees to Switzerland and services of self-employed persons: Information issued by the SECO
Read more in our blog post
{{filterContent.facetedTitle}}
{{contentList.dataService.numberHits}} {{contentList.dataService.numberHits == 1 ? 'result' : 'results'}}
{{contentList.loadingText}}
{{contentList.loadingText}}
