The AVS Pension in Switzerland: Calculation, Contributions and Gaps
Old-Age and Survivors' Insurance (AVS/OASI) constitutes the 1st pillar of the Swiss pension system. Founded in 1948, it aims to cover basic needs in retirement. The AVS pension depends on the number of years of contributions and the average income. The AVS 21 reform, in force since 1 January 2024, has brought significant changes, notably by harmonising the retirement age at 65 for both men and women. PBM Avocats advises insured persons in Geneva and Lausanne on their AVS rights.
How Is the AVS Pension Calculated?
The AVS pension is determined by two main factors:
- The number of years of contributions: a full pension requires 44 complete years of contributions (for persons born after 1966). Each missing year reduces the pension by 1/44th
- The determining average annual income (DAI): the average of income subject to AVS contributions over the entire contribution period, with a bonus system
| Type of Pension | Minimum Amount (2024) | Maximum Amount (2024) |
|---|---|---|
| Full individual pension | CHF 1,225 / month | CHF 2,450 / month |
| Couple's pension (capped) | – | CHF 3,675 / month (150% max) |
| Survivors' pension (widow/widower) | CHF 1,020 / month | CHF 2,040 / month |
| Orphan's pension | CHF 490 / month | CHF 980 / month |
Bonuses for Child-Rearing and Care Tasks
To mitigate inequalities resulting from career breaks, AVS provides for child-rearing bonuses and care task bonuses:
- Child-rearing bonus: granted for each year of caring for a child under age 16. It corresponds to 3 times the minimum annual pension (CHF 44,100 in 2024). It is attributed to the parent who assumes primary care, or shared between both parents if married
- Care bonus: granted for caring for a close relative (parents, grandparents, siblings) who receives a helplessness allowance. It also corresponds to 3 times the minimum annual pension
AVS Contribution Gaps: Causes and Consequences
A contribution gap arises when the minimum AVS contributions have not been paid for an entire calendar year. Common causes include:
- Years of study without gainful activity (between age 18 and the end of studies)
- Stays abroad without a social security agreement
- Periods of professional inactivity not covered by the status of insured person's spouse
- Contributions as non-gainfully-employed person (NGEP) not paid
- Registration errors in the individual AVS account
Each contribution gap reduces the pension by approximately 1/44th of the full pension. For a maximum pension of CHF 2,450, one gap represents a loss of approximately CHF 55 per month for life.
Income Splitting Between Spouses
Splitting is a conjugal solidarity mechanism in the calculation of the AVS pension. During the years of marriage, the income of both spouses is added together, then divided equally between them. This mechanism primarily benefits the spouse who has reduced their professional activity to care for children or the household.
Splitting is carried out automatically when the pension is calculated if:
- The marriage lasted at least one complete calendar year
- Both spouses are recipients of an AVS pension (or one has deceased)
Early and Deferred Retirement: Flexibility Since AVS 21
The AVS 21 reform introduced greater flexibility in taking retirement:
- Early retirement: possible from age 63, with an actuarial reduction of the pension for the duration of the early retirement. The reduction is permanent
- Deferred retirement: possible until age 70, with a pension supplement for each year of deferral
- Partial retirement: it is possible to take partial retirement (between 20% and 80% of the pension) and continue working partially
At what age can one retire in Switzerland?
With the AVS 21 reform that entered into force on 1 January 2024, the reference age is 65 for both men and women. Early retirement from age 63 is possible (with a reduction in the pension), and retirement may be deferred until age 70 (with an increase). Women born between 1961 and 1969 benefit from transitional measures.
How can AVS contribution gaps be avoided?
Contribution gaps arise when a calendar year passes without the minimum AVS contributions having been paid (for example during studies, a stay abroad, or a career break). These gaps reduce the pension. They cannot be made up retrospectively after 5 years. Persons without gainful activity must pay contributions as non-gainfully-employed persons (NGEP).
What is AVS splitting and to whom does it apply?
Splitting consists of adding together the income of both spouses during the years of marriage and dividing them equally between them for the calculation of the AVS pension. It applies automatically when the pension is applied for if the marriage lasted at least one year and provided that both spouses are retired (or one has deceased). In the event of divorce, splitting is carried out at the time of the divorce.
Can an AVS pension and a salary be combined?
Yes, since the AVS 21 reform, it is possible to continue working after age 65 while receiving the AVS pension. Work income beyond age 65 may even improve the pension if it had not yet reached the maximum. The applicable exemption is CHF 16,800 per year for persons who continue working after the reference age.
How can an AVS decision on the amount of my pension be contested?
If you consider that the amount of your AVS pension is incorrect, you may request an individual account statement to verify the contributions recorded. In the event of an error, you have 30 days to file an objection with the competent compensation office. An appeal before the cantonal insurance court is possible if the objection is rejected.