Pension figures 2023: higher AHV pensions and more pillar 3a deductions!

Last update: 17.09.2024 08:33

The 2023 key pension figures for AHV, occupational pension provision and pillar 3a determine how high your pension will be. 1st and 2nd pillar fail. As of January 1, 2023, there will be changes to the pension key figures for 2023. Find out how these will affect your future pension amount and how much more you can deduct from pillar 3a from 2023.

Every year on January 1, 2023, there are more or less significant changes to social insurance. The Federal Social Insurance Office (FSIO) makes these available in numerous documents and publications. We have sifted through them for you and reduced them to the most important changes.

In the 1st pillar, the maximum AHV pension will increase byCHF 720 per year in 2023

Every two years, the Federal Council reviews whether the AHV and IV pension amount needs to be adjusted due to price and wage developments. This time there will be a substantial increase in the maximum AHV pension of CHF 720 per year, which is 2.5 % more than in the previous year. This was decided by the Federal Council at its meeting on October 12, 2022. Compared to the last increase in 2021 of CHF 240, this is a large increase and reflects the higher inflation rates. The maximum AHV pension in 2023 will therefore rise from CHF 28,680 to CHF 29,400 per year from January 1, 2023. In order to receive this, you must have earned an average of at least CHF 88,200 for 44 years and/or have received childcare credits that put you above this average.

The minimum 2023 old-age pension will increase to CHF 1,225 per month from January 1, 2023. The maximum AHV pension for 2023 with a full contribution period will also increase. It now amounts to CHF 2,450 per month. The maximum AHV spouse’s pension from January 1, 2023 will be CHF 3,675 (= CHF 2,450 * 1.5) due to the cap.

But there may be more to come. In addition to these adjustments, there are likely to be further increases over the course of the year. Several motions have been adopted in Parliament calling for a full inflation adjustment for AHV, IV, supplementary benefits (EL) and bridging benefits (ÜL). These are likely to be dealt with as a matter of urgency in the 2023 spring session.

The AHV21 reform will enter into force on January 1, 2024. This was decided by the Federal Council at its meeting on December 9, 2022. In two specialist articles, we have examined what this means for your AHV pension and what changes it will bring to the second pillar.

There’s good news for anyone with an annual income of over CHF 148,200. The “solidarity percentage” of 1% to unemployment insurance on salary components over CHF 148,200 will be abolished. So there will be less deduction from wages. Up to this upper salary limit, the contribution rate is 2.2%. For employees, the employer pays half of the contribution (1.1%). The reason for the abolition is a legal provision. The solidarity contribution may only be levied until the equity capital of the ALV compensation fund exceeds CHF 2.5 billion at the end of the year. This will be reached at the end of 2022.

The minimum contribution will rise from CHF 503 to CHF 514 from the start of 2023. You can read more about this in the information sheet with the changes from January 1, 2023.

In addition, the first pillar of the social security system will be extended to include two weeks of adoption leave. This supplements the paid maternity leave (2005, 14 weeks) and the paid paternity leave (2021, 2 weeks). Adoption leave must be taken either on a daily (10 days) or weekly (2 weeks) basis no later than 12 months after the child is adopted. The daily allowance is paid from the Income Compensation Ordinance (EO) and amounts to 80% of the average income earned before the child is taken in, up to a maximum of CHF 220 per day. You reach the maximum daily allowance from a monthly income of CHF 8,250. What are the requirements for adoption leave from 2023? Et voila, the checklist:

• the child is less than four years old at the time of adoption
• There is no entitlement if you adopt the child of your wife or husband.
• the adoptive parents were insured under the AHV scheme for >9 months before the child joined the joint household
• the parents have been employed for >5 months and are employed at the time the child is admitted
• If only one parent meets the eligibility requirements, only that parent is entitled to adoption leave; if both parents are entitled, they are free to choose which of them takes the leave or to split the leave, but not to take it at the same time.

Since October 2022 and until further notice, a transitional arrangement has applied to widowers’ AHV pensions. New widowers with children are now treated equally to widows with children. The reason for the change is the successful appeal by a Swiss widower before the European Court of Human Rights. The Court condemned Switzerland for discriminating against widowers compared to widows. It was discriminatory that widowers’ pensions end when their youngest child comes of age, whereas widows in the same situation receive a pension for life. In order to avoid such discrimination in future, the AHV Act must be amended.

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In the 2nd pillar, the minimum interest rate remains unchanged at 1%

The new maximum AHV pension of CHF 2,450 in 2023 is the key figure for the 2023 key pension figures. Other occupational pension figures are linked to it via fixed formulas and ratios. The expected BVG pensions and BVG key figures will therefore also change.

The minimum interest rate for BVG assets remains unchanged at 1 % – as it has been since 2017. The Federal Council provided information on this at its meeting on October 12, 2022. The Federal Council must review the level of the minimum interest rate at least every two years and will carry out the review next year. You may already know that the minimum interest rate only applies to mandatory assets. In the extra-mandatory scheme, your pension fund itself determines how much interest it pays on your retirement assets.

1% interest means that your retirement assets will only grow very, very slowly. This means that your pension will not be high. A private pension is therefore all the more important the more you are dependent on a pension from the BVG mandatory scheme. You can see the dramatic effect of low interest rates on your pension in another article .

How much income is insured under occupational benefits insurance?

Only the “insured salary” is compulsorily insured under the occupational benefit scheme. This is also known as the coordinated salary. You pay contributions on this, which have a pension-forming effect. The upper limit, i.e. the maximum BVG annual salary and the 2023 coordination deduction , determine how high the insured salary is.

The upper limit will rise to CHF 88,200 from January 1, 2023. The 2023 coordination deduction is CHF 25,725. In order to determine the amount of the insured salary, the pension fund deducts the coordination deduction from your annual gross salary. If your annual salary is between CHF 22,050 (BVG entry threshold 2023) and CHF 29,400 (maximum AHV individual pension), the pension fund will insure you with the BVG minimum salary of CHF 3,675.

From what salary do I have to pay contributions for occupational pensions in 2022?

This regulates the BVG entry threshold, also known as the minimum annual wage. This will increase to CHF 22,050 per year on January 1, 2023. If you earn less, you will not be insured under the occupational pension scheme. You will then not receive a pension from the second pillar. That’s why part-time employees or people with multiple jobs and low workloads need to make sure that they earn more than the BVG entry threshold for 2023. Let’s hope that your salary in 2023 will grow at least in line with inflation and that you will exceed the entry threshold!

What is insured under the AHV and what is insured under the BVG?

You must pay AHV contributions on your entire income. In the AHV, the amount of your salary and the number of years of service determine how high your pension will be. The situation is different with mandatory occupational benefits insurance. Here, only a small part of your income forms your future pension: your salary up to the upper limit minus the coordination deduction. You can imagine it like this: for the first CHF 25,725 or so of your salary (= coordination deduction 2023), you are only insured under the AHV. On the salary that exceeds this, you save for your future pension both in the AHV and in the pension fund. If your income exceeds the upper limit or is below the coordination deduction, you save extra-mandatory amounts in your occupational pension fund in accordance with the regulations of your pension fund.

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In pillar 3a, the maximum amount increasesto CHF 7,056

Other key pension figures for 2023 are derived from the 2023 AHV pension. In particular, the small and large maximum amount for pillar 3a. This year there is a fairly large increase in the pillar 3a deduction. This is because it is linked to the maximum AHV individual pension via a factor. And as we have seen, this has risen quite sharply. That’s why from 2023 you can deduct CHF 173 more from your pillar 3a than in 2022. Self-employed people can also pay in more. However, they must earn at least CHF 176,400 to be able to take advantage of the maximum of 20% or CHF 35,280. I wish it for you!

• The small maximum Pillar 3a 2023 amount for employees with a pension fund is CHF 7,056
• the large maximum amount Pillar 3a 2023 for self-employed persons or part-time employees without a pension fund: 20 % of net earned income, maximum CHF 35,280

You can use the small pillar 3a amount if you are insured with a pension fund through your employer. You can use the large amount if you do not belong to a pension fund, for example if you are self-employed or work part-time. This is to prevent a pension gap from occurring because you will not receive a pension from the occupational pension fund.

Here’s how: make the most of your options and avoid common mistakes in pillar 3a.

Summary of key pension figures 2023

Many important key figures will change in 2023. The reason for this is the increased maximum AHV pension. In the 2nd pillar, the minimum interest rate remains low at 1%. And in pillar 3a, the maximum tax deduction has increased to over CHF 7,000 for the first time. In view of these unattractive prospects, you should definitely take care of your private provision.