Retirement provision when you are self-employed

In one line: Nobody contributes on your behalf — the AHV still applies, but the pillar that usually does the heavy lifting is optional, and that is the whole problem.

An employee's retirement is built by three parties: the state, the employer and themselves. Take the employer out and one of the three pillars becomes voluntary. This guide sets out what remains compulsory, what is optional, and where the gap opens.

The AHV still applies

The first pillar is compulsory for the self-employed exactly as it is for employees. You contribute on your business income at rates set for self-employed persons, applied on a declining scale for lower incomes.

Two practical points:

• Declare your income correctly and on time. Contribution years are what build the pension, and a year with no contribution is a permanent reduction of roughly 1/44.
• Contributions are settled through your compensation office (Ausgleichskasse), which you must be affiliated with once your self-employed status is recognised.

There is no compulsory second pillar

This is the structural difference. Occupational pension cover is compulsory for employees above the entry threshold; the self-employed are simply outside that obligation.

For an employee, the pension fund is where the employer's share lands — at least half of the total contribution. Working for yourself, that contribution does not exist unless you create it. Left alone, the gap between AHV income and your accustomed standard of living is much wider than an employee's.

Two ways to build the missing pillar

Join a pension fund voluntarily

The self-employed may affiliate to an occupational pension institution — often through a professional association, a collective foundation, or the fund of your own employees if you have any. Contributions are then deductible, the savings are protected, and you gain access to voluntary buy-ins, which are a powerful deduction for higher incomes.

Use the extended Pillar 3a

Self-employed people without an occupational pension are allowed a much larger 3a: 20% of net income, capped at CHF 36'288 for 2026, against CHF 7'258 for someone with a pension fund.

That is the single most useful provision for many sole traders. Note the condition carefully — the higher limit exists because there is no second pillar. Joining a pension fund moves you to the lower 3a limit, so the two routes have to be compared, not stacked.

The trade-off nobody mentions

Provision competes with your business for the same cash. Money in a 3a or a pension fund is locked, and locked capital is not working capital.

The counterweight is that both are deductible in the year you pay in, and irregular income makes that deduction more valuable in strong years than in weak ones. Contributing more in a high-income year and less in a lean one is a legitimate way to run it.

Common questions

Do the self-employed pay AHV?

Yes. The first pillar is compulsory for the self-employed too, at contribution rates set for self-employed persons and applied on a declining scale at lower incomes.

Do I have a pension fund as a self-employed person?

Not automatically. You are outside the compulsory scheme, but you may affiliate voluntarily through a professional association or a collective foundation.

How much can I put into Pillar 3a?

If you have no occupational pension, 20% of net income up to CHF 36'288 for 2026. If you do have one, the ordinary limit of CHF 7'258 applies instead.

Can I use my existing pension capital to start a business?

Vested benefits can be withdrawn early to take up self-employment, but the route is narrow — it applies to a sole proprietorship rather than to founding a company, and conditions and deadlines apply.

Sources: AHVG (SR 831.10) Art. 8–9 (self-employed contributions and the declining scale); BVG (SR 831.40) Art. 2 and Art. 4 (compulsory insurance for employees, voluntary affiliation); BVV 3 (SR 831.461.3) Art. 7 (extended 3a limit without occupational pension); FZG (SR 831.42) Art. 5 (early withdrawal to take up self-employment).

Educational information, not financial advice. Figures are for 2026 and may change.