Social and pension insurance Every person living or working in Switzerland is obliged to pay into the Old Age and Survivors‘ Insurance, Disability Insurance, the occupational pension pools, the unemployment insurance and the accident insurance. All contributions are deducted directly from wages. The Swiss pension system is based on three pillars: Pillar 1: Old Age and Survivors‘ Insurance (Alters- und Hinterlassenenversicherung, AHV) and Disability Insurance (Invalidenversicherung, IV) The object of this insurance is to provide a basic standard of living. It pays benefits during retirement and in the event of disability or death, and is obligatory for everyone living or working in Switzerland. Pillar 2: Occupational pension (Berufliche Vorsorge, BV) This supplement to the AHV and IV ensures the continuation of an individual’s standard of living in retirement or disability. Upon the death of the insured, the occupational pension supports survivors with a pension or lump-sum payment. All employed persons who are insured under AHV and have a certain minimum income are obliged to pay contributions. Pillar 3: Individual pensions These additional private schemes are voluntary and are designed to close individual gaps in provision. The law promotes pension savings in Pillar 3 through tax incentives. Unemployment insurance (Arbeitslosenversicherung, ALV) All persons employed in Switzerland who have not yet reached retirement age are obliged to be insured against unemployment. Contributions are equally split between the employer and employee. The premiums are based on a percentage of the insured income and are deducted directly from the salary. Anyone wishing to claim unemployment benefits must register with the local employment office no later than the first day after becoming unemployed. Unemployment benefits consist of 70 per cent of income, based on average earnings for which contributions were payable over the last six months. The upper limit of the contributory income is determined by the government.