What happens to your pension when you lose your job? Five key questions and answers

Job losses in Switzerland are increasingly disrupting retirement plans, especially for older workers. Companies like UBS, Helvetia Baloise, and Novartis have announced significant layoffs, with the Swiss industrial sector alone losing 6,600 jobs last year, according to industry association Swissmem.

Losing a job can be a major setback, particularly for those nearing retirement. Teodora Toma, a pensions specialist at Pensexpert, notes that many prioritize finding new employment immediately, often submitting numerous applications. However, she warns that neglecting retirement planning during this period can have costly consequences.

"The years just before retirement are the most important for pension planning," Toma explains. High interest rates on pension funds for active members in a given year can significantly benefit those who have already accumulated substantial capital. Therefore, understanding options for maintaining pension benefits is crucial for those facing job loss.

Harald Hengartner, a specialist at Axa Switzerland, outlines three main options for pension fund assets after a job loss: drawing retirement benefits, transferring funds to a vested benefits account, or continuing coverage within the existing pension fund. Since 2024, pension funds are required to allow early retirement benefit withdrawals from age 63, though many practical arrangements may allow it sooner.