OASI Benefits and financing
A person who has contributed to the OASI system for at least one year is entitled to claim benefits. The OASI also grants collective benefits to private charity organisations, such as Pro Senectute or Spitex, that provide assistance to the elderly.
Individual benefits are as follows:
Men are entitled to old-age pensions from the age of 65 on. Since 1 January 2005 women have been entitled to draw state pensions at the age of 64.
Pensions for married couples
Instead of a single pension for a married couple, each spouse now receives an individual pension. However, the total amount of the two individual pensions may not exceed 150% of the maximum pension, i.e. Fr. 3,675 per month.
In addition to their old-age pension, men and women are entitled to draw a child's pension for each child that would be entitled to an orphan's pension in the case of their death. Children's pensions are paid out to people with children up to the age of 18 (or 25 if they are in full-time education) as well as people who look after foster children without remuneration.
If both parents draw an old-age pension two children's pensions may be claimed. If both pensions together exceed 60% of the maximum old-age pension, i.e. Fr. 1,470 per month, the total amount paid out is reduced.
Children up to the age of 18, or 25 if they are in full-time education, whose mother or father has died are entitled to an orphan's pension which corresponds to 40% of the old-age pension. If both parents have died the orphan may claim two pensions, which together cannot exceed 60% of the old-age pension.
This benefit is for women who have dependent children at the time of their spouse's death. Women without dependent children must be over the age of 45 and have been married for at least 5 years to be entitled to a widow's pension. The widow's pension corresponds to a maximum of 80% of the old-age pension.
Under certain conditions divorced women may also draw a widow's pension.
If a woman is entitled to draw an old-age pension or an invalidity pension in addition to a widow's pension, only the higher pension will be paid out.
This benefit was first introduced with the 10th OASI revision. Widowed men may claim such a pension as long as their children are under the age of 18.
Pensioners may also claim incapacity benefits in addition to their old-age pensions if they can prove a serious or medium incapacity. Incapacity is defined as the need for assistance from a third party for daily activities such as dressing, using the lavatory, eating, etc. The amount paid out as incapacity benefits is not dependent on income or wealth.
The OASI also pays for a range of auxiliary measures or equipment that pensioners need to ensure their mobility, social contact or independence, e.g. prostheses, hearing-aids or orthopaedic footwear.
As a rule the Federal Council adjusts pensions in line with salary and price trends every two years. Pensions are adjusted earlier if annual inflation exceeds 4%. Adjustments are calculated according to the so-called mixed index, which corresponds to the mean salary and price index.
On 1 January 2023 OASI and II were increased.
Type of pension
Monthly pension based on full duration of contribution
as from 1.1.2023
Minimum Fr. 1225.--
Maximum Fr. 2450.--
Minimum Fr. 368.--
Maximum Fr. 717.--
Minimum Fr. 980.--
Maximum Fr. 1912.-
Minimum Fr. 490.--
Maximum Fr. 956.--
Fr. 245.-- for slight incapacity
Fr. 613.-- for moderate incapacity
Fr. 980.-- for severe incapacity
The OASI is financed through a contribution system. In contrast to occupational pensions or a savings account, the contribution system does not involve life-long savings to amass a certain capital.
Each year, the OASI pays out roughly the same amount as it receives, i.e. within the same financial period the amount it receives in contributions is paid out in benefits. Thanks to this system of financing once increases in pensions have been decided they can be applied immediately.
The benefits paid out by the OASI are mainly financed through the contributions paid by those insured and their employers. The Confederation also contributes 20,2 % of outgoings. It acquires this sum through the taxes on tobacco products, alcohol and gambling casinos. Since 1999 the OASI has also been receiving one percentage point of VAT.
In 1999, VAT was raised by 1% to finance the OASI. Initially, 83% of the revenue generated by this increase went to the OASI, and the remaining 17% to the Federal Treasury. Since 2020, the OASI receives 100% of this one percentage point rise, also called the ‘demographic percent’. Revenue from the casino tax also goes directly to the OASI.
The OASI compensation fund enables the OASI to absorb major expenditure fluctuations. It also serves as a compensation and contingency reserve and as an investment vehicle for OASI capital. The law stipulates that the fund must always have sufficient capital reserves to cover at least one year’s worth of OASI expenditure. At the end of 2022 these reserves totalled 47.0 billion Swiss francs (98% of annual spending).
OASI ended 2022 with a surplus of CHF 1.6 billion. Following an exceptional year for the stock markets, OASI operating profit, which also takes into account investment income and capital gains, came to -2.7 billion Swiss francs. Total OASI capital stood at 47.0 billion Swiss francs, which corresponds to 98 % of annual spending.
An individual account (IA) is kept for each person who contributes to the OASI fund. The compensation fund offices enter income, duration of contribution and bonuses for care-taking on each individual account, which is later used for calculating pensions. Insured people contribute to the OASI fund at a rate of 8.4% of annual income, a figure which has remained unchanged since 1975. The employer deducts half of the contribution (4.2%) from the employee's salary and pays it into the compensation fund together with his own share (also 4.2%). For each year that the insured person does not contribute to the system his or her benefits are reduced by approximately 2%.
Last modification 01.11.2023