SWITZERLAND

The Swiss pension system rests on three pillars: the Federal Old-age, Survivors’ and Invalidity Insurance (1st pillar), the occupational pension scheme (2nd pillar) and private pension schemes (3rd pillar).

The first pillar provides old age pensions as well as benefits for widowers and orphans. The ordinary age of retirement is 65 years for men, 64 for women. It can be anticipated or postponed, with financial consequences. It is an PAYGO system, financed by contributions from employees and employers (4.2% of the employee’s income each) and shall cover the basic living expenses.

The occupational pension scheme (2nd pillar) shall, together with the Old-age, Survivors’ and Invalidity Insurance, enable the insured person to maintain his or her previous lifestyle in an appropriate manner. It is a funded pension plan. It is compulsory for employees and is financed by both employees and employers. The sum of the contributions of the employer should be at least equal to the sum of the contributions of his employees. The second pillar offers old age pensions. The pension funds also provide benefits in case of invalidity and benefits to survivors in case of premature death. Under certain conditions, the second pillar can be used before retirement to buy a principal home or to start an independent activity.

The third pillar consists of private pension schemes provided by the private sector. It is optional and financed entirely by the individual.

Paid Care Leave (new legislation as per 1 January 2021) the new so-called care leave legislation introduces an obligation on the employer to continue to pay the salary for the care of a family member or partner with a health impairment, during a short-term absence of a maximum of three days per specific impairment, up to a maximum of ten days per year.

Care Leave for the Care of Seriously Ill Children (new legislation as per 1 July 2021): newly introduced is a childcare leave if an employee’s child is seriously impaired in health due to illness or accident. The leave is limited to a maximum of 14 weeks. Salary continuation is governed by the Swiss Federal Act on Income Compensation for Service Providers and for Maternity, which amounts to 80% of the salary and is capped at CHF 196 per day.

The mandatory Accident Insurance (UVG) contributes to the costs of medical treatment and gives financial support after accidents and occupational diseases. All employees occupied in Switzerland are covered. Employees who work for a minimum of eight hours per week are insured not only against occupational accidents and occupational diseases, but also against non- occupational accidents.

Sickness allowance insurance compensates for loss of salary due to incapacity for work caused by illness or pregnancy. Employers are obliged to continue paying salary to the employee in question for a certain amount of time.

The daily allowance benefits insurance relieves the employer from the beginning of the statutory salary payment. The duration of the statutory salary payment depends on the employee’s years of service. Adherence to a daily sickness allowance insurance is, however, not mandatory.

All employees in Switzerland who have not yet reached the legal retirement age must be covered by unemployment insurance, subject to certain conditions.

To be eligible for unemployment benefits, the employee must meet the following conditions:

• In the two years before becoming unemployed and registering with the employment office she or he must have held, for at least 12 months, a job requiring the payment of unemployment insurance contributions.
• He/she must remain at the disposal of the employment office and must at the same time actively seek work on your own behalf.
• If the employee has left his/her previous employment without an acceptable reason the entitlement to unemployment benefits may be suspended for a certain period of time.

If you become involuntarily unemployed, you are entitled to 70% of the average earnings paid into your unemployment insurance in the previous six months. If you have a child or your daily allowance falls below a predetermined minimum, you are entitled to 80% of the average earnings in the last six months.

The unemployment benefit is allocated as a daily allowance covering five days per week. Entitlement begins after a waiting period of five days of proven unemployment. Unemployment benefits provide up to 400 daily allowances to be received in a two- year period. Employees over 55 and having made unemployment insurance contributions for at least 18 months are permitted up to 520 daily allowances in the same period.