The Swiss social security system includes the following schemes:
- Old-age and survivors’ insurance
- Disability insurance
- Military income loss insurance
- Unemployment insurance
- Occupational benefit plan
- Accident insurance
- Sickness insurance
- Family allowances
2. Required Contributions
Basically, the Swiss employer is fully liable to social security contributions in respect of its employees. This system, however, only applies to resident employers and non-resident enterprises having a permanent establishment in Switzerland.
The contributions are borne fifty-fifty by both employer and employees. However, the employer contributes insurance premiums for occupational accidents and diseases. He can deduct insurance premiums for non-occupational accidents (as well as the employee’s share for pension, sickness and unemployment insurance) from the employees’ salary. The rates are, in general, based on the gross salary.
The mandatory Accident Insurance (UVG) contributes to the costs of medical treatment and gives financial support after accidents and occupational diseases. All employees occupied in Switzerland are covered.
Sickness allowance insurance compensates for loss of salary due to incapacity for work caused by illness or pregnancy. Employers are obliged to continue paying salary to the employee in question for a certain amount of time. Adherence to a daily sickness allowance insurance is, however, not mandatory.
All employees in Switzerland who have not yet reached the legal retirement age must be covered by unemployment insurance.
To be eligible for unemployment benefits, the employee must meet the following conditions:
- In the two years before becoming unemployed and registering with the employment office she or he must have held, for at least 12 months, a job requiring the payment of unemployment insurance contributions
- She or he must remain at the disposal of the employment office and must at the same time actively seek work on your own behalf
If the employee has left his/her previous employment without an acceptable reason the entitlement to unemployment benefits may be suspended for a certain period of time.
If you become involuntarily unemployed, you are entitled to 70 per cent of the average earnings paid into your unemployment insurance in the previous six months.
4. Maternity Leave
Maternity leave lasts 98 days (or 14 weeks) from the day it starts. Both full-time and part- time employees are entitled to maternity leave. Women who return to work earlier lose their entitlement to compensation. Mothers are paid 80% of their wages in the form of a daily allowance up to the maximum of CHF 196 per day.
The Swiss pension system rests on three pillars: the Federal Old-age, Survivors’ and Invalidity Insurance (1st pillar), the occupational pension scheme (2nd pillar) and private pension schemes (3rd pillar).
The first pillar provides old age pensions as well as benefits for widowers and orphans.
The ordinary age of retirement is 65 years for men, 64 for women. It can be anticipated or postponed, with financial consequences. It is an PAYGO system, financed by contributions from employees and employers (4.2% of the employee’s income each) and shall cover the basic living expenses.
The occupational pension scheme (2nd pillar) shall, together with the Old-age, Survivors’ and Invalidity Insurance, enable the insured person to maintain his or her previous lifestyle in an appropriate manner. It is a funded pension plan. It is compulsory for employees and is financed by both employees and employers. The sum of the contributions of the employer should be at least equal to the sum of the contributions of his employees.
The second pillar offers old age pensions. The pension funds also provide benefits in case of invalidity and benefits to survivors in case of premature death.
The third pillar consists of private pension schemes provided by the private sector. It is optional and financed entirely by the person.