The Swiss pension system remains much more complex than in France.

 

It is made up of three pillars:

 

The first pillar called AVS (Aide aux Vieillissement des Survivants) is a distribution system like in France. It is mandatory from January 1st following your 17th birthday. The AVS was created in 1946 and is based on a post-war economic system, therefore more suited to our current economy.

 

The second pillar called LPP (Loi de Prévoyance Professionnelle) is, as its name suggests, a professional pension system. These savings are financed partly by you as an employee and partly by your employer. It is mandatory from January 1st following your 24th birthday. It is therefore calculated based on your income and your years worked as an employee.

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The third pillar called PII (Individual Intelligent Pension Plan) is a private savings plan that allows you to fill the gaps in the first two pillars and also protect your family. There are two types of third pillar, 3A and 3B, either the third pillar linked or free, to be adapted according to your personal situation.

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Due in particular to the overall aging of the population as well as negative bank interest rates, income from the 1st and 2nd pillars at retirement is significantly reduced. Today, fewer and fewer workers are contributing for an increasing number of retirees. These different developments make the 3rd pillar an essential element.

 

The third pillar historically, what is it?

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1987: entry into force of the third pillar for Swiss residents as well as cross-border workers, with the aim of being a complementary pension.

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2016: the status for concluding a 3rd pillar contract changes. Companies can no longer subscribe a person working in Switzerland but living abroad.

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2021: final revision of the 2016 law, which is advantageous in terms of taxation and deduction for cross-border workers.

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To date, there are only two companies that allow cross-border workers to benefit from the advantages of the 3rd pillar. What about the future? It is impossible to know whether these companies will remain open to cross-border workers or not. Hence the importance of concluding your 3rd cross-border pillar, while there is still time.

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Despite the many restrictions that we have seen previously, the 3rd pillar is strongly encouraged by the Swiss Confederation, the cantons, the municipalities but also by the French State. Indeed, following the last revision, we know that as long as the third pillar remains open to cross-border workers, the 3A and 3B will always be deductible in the future.

 

Today, having your third pillar means:

 

Advantageous taxation

 

Guaranteed capital

 

A significant return

 

Family protection (life insurance included)

 

A safe haven (the Swiss franc is a historically solid currency)

 

A major asset when financing a property purchase