Retirement provision under pressure: What official figures show

Retirement provision in Switzerland rests on three pillars, each financed differently. The AHV (Old-Age and Survivors' Insurance, the state pension) pays current pensions out of current contributions. The pension fund and pillar 3a build up capital. Germany and Austria rely mainly on a statutory pension that is also financed on an ongoing basis. In all three countries, official scenarios show fewer people of working age for every person of retirement age. As of 10 November 2026.

Retirement provision in Switzerland: the three pillars

Each pillar has its own purpose and its own financing. The amounts apply to 2026 and come from the Federal Social Insurance Office (FSIO).

Together, the AHV and the mandatory pension fund are intended to reach around 60% of previous income, for incomes up to around CHF 90,000. The FSIO cites this as the benefit target.

In the pension fund, the retirement assets are multiplied by the conversion rate. In the mandatory part (the statutory minimum scope), the law sets a minimum rate, which has been 6.8% since 2005. With assets of CHF 100,000, this results in a pension of at least CHF 6,800 per year. Above this minimum, the pension fund sets the rate itself. According to the FSIO, many funds have lowered it there because of rising life expectancy and low interest rates.

Germany and Austria: the same questions, different systems

There too, current contributions pay current pensions. In Austria, the pension is called Pension rather than Rente. The differences lie in contribution rates, federal funding and additional pillars.

As of: Switzerland 2026, Germany 2025 and 2026, Austria 1 January 2026. The figures cannot be compared one to one, because benefits, federal contributions and structure differ.

How many people of working age are there for each person aged 65 and over?

The pay-as-you-go system depends on this figure. In its brochure of December 2025, the FSIO writes: «If the number of pension recipients increases relative to the number of contributors, revenue and expenditure can fall out of balance.»

The FSO works with scenarios for the resident population of Switzerland. At the end of 2023, around 5.44 million people aged 20 to 64 and around 1.73 million aged 65 and over lived in Switzerland. That gives around 3.1 people of working age per person aged 65 and over (own calculation). In the reference scenario (which extends the trends of recent years) for 2055, the figures are around 5.93 million and around 2.67 million, or around 2.2. The «high» and «low» scenarios also give 2.2.

This covers everyone aged 20 to 64, whether they work or not, and not only people who are actually employed. If only the labour force (employed and unemployed people) is counted, the values are lower. The two measures must not be mixed.

Behind this is a simple calculation: contribution per person equals pension divided by the ratio. With a pension of CHF 2,000 and a wage of CHF 6,500 (both freely chosen), the figure is CHF 645 or 9.9% of the wage at 3.1. At 2.2, it is CHF 909 or 14.0%. The AHV does not work like this, because employers also contribute there, and the federal government covers 20.2% of expenditure.

Figures from Germany's Federal Statistical Office (Destatis) and from Statistics Austria also show a rising ratio of retirement age to working age. The age limits matter here.

The figures show people of retirement age per 100 people of working age. For Switzerland and Austria, they are our own calculation from official tables. For Germany, Destatis states the values itself, and the age limits are taken from the Destatis chart.

In the FSO reference scenario, the number of people aged 65 and over rises from 1.8 million (end of 2024) to 2.7 million (2055), an increase of around 50%.

Longer in retirement: life expectancy and lump-sum withdrawals

A study by the Lucerne University of Applied Sciences and Arts and the asset manager Finpact from September 2025 cites, based on an FSO analysis from 2023, a life expectancy at birth of 82.5 years for men and 86 years for women. For 2050, the study cites 87 and 90 years respectively, according to FSO figures. According to the study, capital may need to last 25 to 30 years for a retirement starting at 65.

Many retirees withdraw their pension fund assets in full or in part as a lump sum. According to the FSO's New Pensions Statistics (press release of 25 November 2024), of the people who received a new pension fund benefit in 2023, 41% received only a lump sum, 40% only a pension and 19% a combination of both. According to the study, based on FSO data, the volume of lump sums paid out rose from just under CHF 6 billion in 2012 to over CHF 13 billion in 2023. Anyone who takes a lump sum manages it themselves and bears the risk that it will not last a lifetime. With a pension, the pension fund bears this risk, but the capital is no longer freely available.

What the authorities show for the coming years

In Switzerland, the FSIO calculates the financial outlook for the AHV every year. The edition of 2 July 2026 (2025 prices) shows in the reference scenario a pay-as-you-go deficit, meaning a gap between current revenue and expenditure, of around CHF 1.3 billion for 2026, around CHF 2.7 billion for 2030 and around CHF 4.9 billion for 2035. The FSIO cites as causes the 13th AHV pension, which is due for the first time in 2026, costs around CHF 4 billion and is not currently funded, as well as weak employment growth. The outlook has deteriorated slightly compared with the previous year. The projections run until 2040. According to the FSIO, they are subject to great uncertainty beyond ten years.

In Germany, the Federal Government presented the Pension Insurance Report 2025 on 19 November 2025. According to the report, the pension level, more precisely the protection level before taxes, will remain at 48% until 2031 and, according to the model calculation, will then be around 46.3% until 2039. This is not a share of the last wage. It compares a standard pension (45 years of contributions on average earnings) with average earnings, after social security contributions and before taxes. In the model calculation, the contribution rate rises from 18.6% until 2027 to 21.2% in 2039. The calculation is based on current law and drafts adopted by the Cabinet.

In Austria, according to the long-term report of the Old-Age Security Commission (Alterssicherungskommission) of 29 November 2024, federal funds for statutory pensions and civil servants' pensions combined will rise by 1.1 percentage points of economic output (gross domestic product) by 2070.

Adopted, put to a vote, only proposed

The FSIO names three levers: the length of time pensions are drawn, the level of benefits and revenue. Decisions are made in a democratic process. For any change, what matters is the stage it has reached.

On the vote of 29 November 2026, the federal government's voting page states that everyday necessities such as food and medicines are exempt, and the change would take effect at the earliest at the beginning of 2028. The Federal Council and Parliament recommend a yes vote. A minority in Parliament rejects the proposal. It wants to settle the financing of the 13th pension in a later reform, including through a higher retirement age. According to the FSIO, with the increase from 2028 the deficit in 2030 would be around CHF 1.2 billion instead of CHF 2.7 billion. How voters will decide is open.

Private retirement provision in Switzerland: pillar 3a

Alongside state and occupational provision, there is private provision. In Switzerland, pillar 3a is the tied form. In 2026, the maximum is CHF 7,258 per year for people with a pension fund. Without a second pillar, it is up to CHF 36,288, but no more than 20% of earned income. The money may be withdrawn at the earliest five years before and at the latest five years after the reference age, with exceptions, for example for home ownership, self-employment or leaving the country. According to the FSIO, inflation and low interest rates affect the result.

How compound interest works over long periods and what it requires is shown in the article Compound interest: starting early. Whether and how someone makes private provision depends on their personal situation, and tax rules may differ.

Risks and limitations

• Losses on private investments: A private investment can lose value. How much depends on the product chosen. Costs and taxes reduce the result. How pillar 3a assets are treated if a bank fails is described in the article on deposit insurance in Switzerland.
• Inflation: If prices rise faster than the assets, purchasing power falls. How to calculate this is shown in the article on returns after deducting inflation.
• Lock-in: Pillar 3a money is generally locked in until five years before the reference age. According to the FSIO, pension fund benefits in the extra-mandatory part, meaning above the statutory minimum, depend on the individual fund.
• Scenarios are not forecasts: They only apply if the assumptions about immigration, births and life expectancy materialise. Destatis stresses that its projections are not predictions but if-then statements. Authorities revise their figures, as the slight deterioration in the FSIO's financial outlook shows.
• Different measures: The pension level (Germany), the conversion rate (Switzerland) and the benefit target of around 60% (Switzerland) are not the same thing.
• Calculator and politics: The calculator is highly simplified and is no substitute for a personal pension calculation. Commission recommendations are not law.

Conclusion

Retirement provision in Switzerland rests on three pillars: the AHV on a pay-as-you-go basis, and the pension fund and pillar 3a with accumulated capital. In Germany and Austria, the statutory pension is at the centre, also on a pay-as-you-go basis. In the official scenarios of all three countries, the ratio of people of working age to people of retirement age falls. In the example, with a pension of CHF 2,000 and a wage of CHF 6,500, the contribution per person rises from CHF 645 to CHF 909, excluding employer contributions, federal funds and reserves. Scenarios are not forecasts, and the outcome of the vote on 29 November 2026 is open.