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What is a contribution gap?

If you have met your contribution obligations without any gaps, you will receive a full OASI pension when you retire at the reference age. No gaps means:

  • You paid OASI contributions with no breaks from 1 January after reaching the age of 20 until you reached the reference age. For men, this results in a total of 44 contribution years (as of 2024), and for women, 43 years. Under OASI 21, the reference age for women will be gradually increased from 2025, so that the contribution period for both genders will be 44 years by 2028.

For the full pension to reach the maximum amount, the following condition must also be met:

  • During these years, your average income (earned income plus caregiving and child-raising credits) was at least CHF 90,720 per year. When calculating this average, the fact that previous incomes were lower due to inflation is taken into account.

 

What pension reductions result from OASI contribution gaps?

The maximum monthly pension for an individual is CHF 2,520 and CHF 3,780 for a married couple. For each year you did not make OASI contributions, your pension will be reduced by 1/44 or around 2.3 percent.

If you have made OASI contributions for less than 44 years (women: 43 years), you will not receive a full pension but a partial pension. This also applies to the minimum pension, which is reduced depending on the number of missing contribution years.

What can cause a contribution gap?

There are several reasons why someone may fail to pay their mandatory insurance contributions for a period or why they may not pay any OASI contributions despite a continuing obligation to do so.

How can OASI contribution gaps arise?

Longer periods abroad

Moving abroad

Studies

Very short periods of employment

Divorce

Retirement of spouse

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How can I obtain the maximum pension?

You may be able to close or offset any gaps in your contributions that are identified in time. Under certain circumstances, this may enable you to obtain the maximum pension.

Close OASI contribution gaps: here’s how

  • Make retroactive payments: You can make up for missing OASI contribution periods within five years, provided you were previously insured with the OASI. After that, you can no longer make retroactive payments.
  • Parental credits: Parents benefit from education credits for the years in which their children were under the age of 16. For each year, they can apply to the compensation office for a credit amounting to three times the annual minimum pension – currently CHF 45,360 – as notional income.
  • Caregiving credits: If you look after relatives in need of care before you retire and report this to the OASI, you will also be credited with three times the minimum annual pension for each year reported.
  • Compensation: Anyone who completed an apprenticeship between the ages of 17 and 20 can claim these so-called “youth years.” There are also up to three years of compensation for gaps in contributions that occurred before 1979.
  • Continuing to work beyond the reference age: If you continue to work beyond the reference age, you can use these additional years to close earlier contribution gaps until you reach the age of 70, subject to certain conditions.

Prevent OASI contribution gaps

Do you have any gaps in your contributions? You can find out by requesting a statement for your individual account (IK extract) from your compensation office. This will also tell you the year in which the gaps occurred. Make sure to order statements for all accounts that the OASI holds for you.

Good to know

Are you unable to close your contribution gap despite additional payments, credits or compensation? Then take the following steps to ensure a financially secure retirement:

  1. Check what income you can expect in old age (for example, using our pension calculator).
  2. Comprehensive budget planning will ensure that your income will cover the expected expenses.
  3. If there is a pension gap, it can be closed through tax-privileged savings in pillar 3.

As an alternative to building up assets through pillar 3, you can defer your retirement partially or completely for a period of up to five years.

What are the consequences of the OASI 21 reform on contribution gaps?

  • The reference age for women will gradually be raised to 65 from 2025, bringing it into line with the reference age for men. From 2028, the OASI will also expect women to have paid contributions for 44 years instead of the previous 43 years. The contribution period increases by three months in each of the transition years.
  • Following the passing of the OASI 21 reform, as of 1 January 2024 it has been possible to continue working beyond the reference age and have OASI contributions credited to your account, provided you do not already have a maximum pension. If you earn less than CHF 16,800 a year, you can decide for yourself whether you want to pay OASI contributions or claim the tax-free allowance .
  • Up to the age of 70, you can apply for a one-time recalculation of your pension that takes into account the income earned after the reference age. Anyone who has not yet reached the age of 70 at the beginning of 2024 but has made contributions beyond the reference age can retroactively request a recalculation of their pension. The OASI compensation office should check whether contribution gaps can still be closed in this way.

Conclusion

More and more pensioners are living much longer than was the case just a few generations ago. At the same time, expenses during retirement are rising steadily. This makes avoiding contribution gaps all the more important. To plan for measures such as additional payments, compensation, or building wealth through pillar 3 early, you should anticipate what factors could cause a contribution gap in good time. This will ensure that you can maintain your standard of living in old age and enjoy your retirement to the full.

Good to know

Disclaimer

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