Living abroad may result in reductions to Swiss pension benefits

Anyone wishing to spend their retirement abroad should, as far as possible, ensure they have no gaps in their contributions to the statutory pension scheme. Getty Images

Want to enjoy your retirement in another country? Many Swiss nationals living abroad are making this dream a reality. But they often face a rude awakening: their pension turns out to be significantly lower than expected. The reason? A gap in their contributions, which can end up costing them dearly.

Even a single year’s gap in contributions to the Old Age and Survivors’ Insurance (AHV) scheme can result in a lifelong “penalty” in Switzerland.

In Switzerland, such contribution gaps can generally be back-paid for the last five years. For many of the roughly 800,000 Swiss citizens living abroad, however, an AHV gap can become a harsh reality. This is because such gaps are often only noticed when it is too late to rectify them.

The first of three pillars

Switzerland bases its pension system on the so-called three-pillar system. The AHV is the first pillar. This pension, which is normally paid out from the age of 65, is based on the principle of solidarity: young people and high earners finance the pensions of the elderly and those on lower incomes.

However, anyone wishing to receive a full pension must be able to demonstrate 44 full years of contributions without any gaps. For every year missing – whether due to a sabbatical, studying or moving abroad – the pension is reduced by 1/44, which corresponds to a reduction of around 2.3%.

However, even those who have paid contributions for all 44 years (currently 43 years for women) will not automatically receive the maximum pension of CHF2,520 ($3,100) (as of 2026). To qualify, an average income of over CHF90,000 would have had to be achieved over the years – an amount that is adjusted for inflation for earlier years.

You can find further helpful articles on emigrating and living abroad on our Moving Abroad Made Easy page. Official information from the federal government is available on the foreign ministry websiteExternal link and via the ch.ch portalExternal link; the Organisation of the Swiss AbroadExternal link (OSA) provides further advice.

The second pillar is the pension fund, which provides compulsory occupational pension provision for those with an annual income of at least CHF22,680 (currently), and supplements the AHV. Self-employed people are not compulsorily insured but may join a pension fund on a voluntary basis.

Finally, the third pillar is entirely voluntary and is regarded as private provision, which can be used to top up one’s retirement pension and actively save on tax. However, not everyone can afford a third pillar.

But let’s return to the AHV.

Why Swiss citizens living abroad are particularly affected

What is unusual about the AHV is its strict link to one’s place of residence or place of work within the country’s borders. As soon as someone crosses the border to start a new life abroad, compulsory insurance cover generally ceases. And this is where the risk begins, because it depends heavily on where one emigrates to.

The situation is made particularly complex by the bilateral agreements between Switzerland and the European Union. Anyone moving to an EU or EFTA country becomes part of the social security system there.

Paradoxically, it is then no longer possible to continue making voluntary contributions to the Swiss AHV, as these countries operate on the principle that a person can only be insured under one system at a time.

Anyone wishing to receive a full pension must be able to demonstrate 44 consecutive years of contributions. They must also have earned an average income of over CHF88,000. Keystone

Swissinfo reader Daniel Luder, who has emigrated to France, describes this situation in our debate on the topic as “highly flimsy”: he says his wife was effectively “kicked out” of the AHV following the signing of the agreements between Switzerland and the EU.

As the French system does not offer comparable cover for those not in employment, this resulted in his wife receiving an incomplete Swiss pension and a French pension of just €43.21 (CHF35) per month. The couple are now living in Switzerland again.

The notorious one-year deadline

For Swiss nationals living outside the EU – for example in Thailand, the US or Brazil – there is the option of voluntary AHV. But here, too, a cultural peculiarity lurks: Swiss discipline. You have exactly one year to declare your intention to join. If you miss the deadline by even a single day, the door is closed for good.

This topic is the subject of heated debate within the community. User Cynthia Rodgers reports with relief that she almost missed the deadline and submitted her application literally on the very last day.

Anyone who misses this deadline – as is the case for many expats who first have to find their feet in their new country – will face massive cuts to their benefits later on.

User Rainer Blaser therefore strongly advises anyone emigrating to third countries to register immediately with the Swiss Compensation Office in Geneva, which is responsible for matters concerning Swiss citizens living abroad.

Historical shortfalls that particularly affect women

Interestingly, many gaps have persisted for decades without being noticed. In the 1970s and 1980s, awareness of this issue was still far lower.

User Sue Heimchen points out that, at that time, women were often unable to work at all or, due to bringing up children, failed to accumulate the necessary contribution years or achieve the required average income. Many only realise upon retirement that they are missing contribution years from their youth.

Another example from our debate is user “Paul srg”, who emigrated to Germany in the mid-1980s after completing his studies. Although he continued to pay the minimum contribution for a few years, he then had to stop due to the costs of supporting his family.

Today, his AHV consists “mainly of gaps”. Nevertheless, thanks to the strong Swiss franc, he is still satisfied with what he receives. As he writes, his AHV contributions are “the best investment I’ve ever made in my life!”

Anyone who emigrates to another country where they can make voluntary AHV contributions must register with that fund within one year; otherwise, it’s too late. Keystone / Jochen Eckel

A rude awakening on return

But what happens if the dream of living abroad comes to an end, or the longing for home becomes too strong? In that case, the gap in AHV cover can become an existential threat in expensive Switzerland.

This is because back payments for missing contributions are only possible for the last five years – and even then, only if you were resident in Switzerland during that time, or at least in gainful employment.

Caroline Zähner Fässler describes her return in particularly dramatic terms: instead of a pension, after registering in Switzerland she received massive bills for back payments as a non-working person, including 5% interest on arrears. She feels “punished”, even though she was trying to stand on her own two feet. “If I’d had a GmbH [her own company], that wouldn’t have happened,” she writes.

At the residents’ registration office, nobody told her that she had to register with the AHV. “Ignorance of the law is no defence,” she writes. This principle is applied particularly strictly in Switzerland.

So anyone who emigrates must calculate their contributions carefully. And anyone returning to Switzerland must look even more closely at pension issues. This is because the Swiss AHV system was designed for a world in which people stay in one place for their entire lives.

In an age of global mobility, the rigidity of the 44-year contribution period required for a full pension is proving to be a stumbling block for many Swiss citizens living abroad.

However, it is also possible to take a pragmatic approach, as our user Dario Gerber has done: he emigrated to France at the age of 57 and now lives there on a reduced pension. His conclusion: “Nothing is more valuable than time.”

Tips for the Swiss community around the world: How to secure your pension

Order your IA statementExternal link: This is your individual account statement, which lists all your contributions. Experts recommend requesting this free of charge every three to five years to identify any gaps in good time.

Make use of the five-year deadline: Any gaps discovered can be back-paid within five years. However, you must have been resident in Switzerland or in employment there during the period for which back payments are to be made.

Contact the Swiss Compensation OfficeExternal link in Geneva: This is the central point of contact for all matters concerning Swiss citizens living abroad and those of Swiss origin living abroad.

Report a change of residence: Inform the Compensation Office whenever you move across national borders.

Anyone living in a country outside the EU or EFTA may join the voluntary AHV/IV scheme within a maximum of one year of emigration in order to avoid pension gaps. Under the Agreement on the Free Movement of Persons between Switzerland and the EU, this also applies to EU nationals.

Anyone living in an EU or EFTA country cannot make voluntary contributions to the AHV, but will receive a partial pension in old age from all those EU countries in which contributions were paid for at least one year.

And very importantly: to receive benefits from the AHV, an application must be submitted to the Central Compensation OfficeExternal link approximately six months before reaching retirement age (currently 64 for women and 65 for men).

Edited by Marc Leutenegger. Translated from German, sub-edited by ts