Switzerland's social security system rests on a 'three pillar' model: Pillar 1 (AHV/IV/EO, mandatory state old-age/disability/loss-of-earnings insurance, pay-as-you-go), Pillar 2 (BVG/LPP, mandatory occupational pension for employees above a salary threshold, individually funded), and Pillar 3 (voluntary private retirement savings, split into tax-advantaged 3a and unrestricted 3b). Self-employed individuals must register directly with a cantonal AHV compensation office and pay both the employer and employee shares themselves, and are generally not subject to mandatory Pillar 2 (though can opt in voluntarily).
Employers and the self-employed both need to actively register with an AHV compensation office rather than assume enrollment happens automatically — and self-employed individuals in particular should understand they carry the full AHV burden alone and should proactively consider voluntary Pillar 2/3a savings since occupational pension isn't automatic for them.
Key Facts
Pillar 1 (AHV/IV/EO): mandatory state insurance covering old-age pension, disability, and loss-of-earnings (e.g. maternity/military service); funded on a pay-as-you-go basis via payroll contributions.
Pillar 2 (BVG/LPP): mandatory occupational pension for employees earning above a coordinated minimum salary threshold; contributions accumulate in individual accounts and rise with age bracket.
Pillar 3: voluntary private retirement savings; Pillar 3a offers tax-deductible contributions up to an annual cap (higher cap for those without a Pillar 2 pension fund, e.g. many self-employed); Pillar 3b is unrestricted private savings/insurance.
Self-employed individuals register directly with a cantonal AHV compensation office (Ausgleichskasse) and pay the full AHV/IV/EO contribution themselves (no employer to split it with), calculated on declared self-employment income.
Employers with staff must register the business with an AHV compensation office, an accident insurer (UVG), and a pension fund (BVG) — these are separate registrations, not a single unified enrollment.
Steps
Register with an AHV compensation office — Mandatory for both employers (for their staff) and self-employed individuals (for themselves).
Enroll in a pension fund (BVG) if employing staff above the threshold — Occupational pension is mandatory for eligible employees; self-employed can join voluntarily.
Consider voluntary Pillar 3a contributions — Especially valuable for self-employed individuals without a Pillar 2 pension, given the higher contribution cap available to them.
Costs
Self-employed AHV/IV/EO contribution rate: ~10% of declared self-employment income (full amount, no employer split)
Required Documents
AHV compensation office registration
Business registration/Commercial Register extract (if applicable)
Income declaration for self-employed contribution calculation
Common Mistakes
Self-employed individuals not registering promptly with an AHV compensation office, leading to backdated contribution demands.
Assuming Pillar 2 (occupational pension) is automatic for the self-employed — it is voluntary for them, unlike for employees above the salary threshold.
Not taking advantage of the higher Pillar 3a contribution cap available to those without an employer pension fund.