For people who live in Italy and work in Switzerland, pension provision involves more than just the contributions deducted from their payslips. Over the course of their working lives, several systems may come into play: the AVS, occupational pension provision under the LPP, the third pillar and, where contributions have also been paid in Italy, the Italian National Social Security Institute (INPS).
Understanding which system applies, which pension institutions are involved and how insurance periods accrued in the two countries are handled is essential to ensuring that workers receive the benefits to which they are entitled and contact the correct pension institution.
The coordination rules between Italy and Switzerland derive, in particular, from the Agreement on the Free Movement of Persons (ALC) and the European provisions governing the coordination of social security systems, including Regulations (EC) No. 883/2004 and No. 987/2009.
Which Pension System Applies to Cross-Border Workers Between Italy and Switzerland?
As a general rule, anyone working in Switzerland is subject to the Swiss social security schemes provided for under the applicable legislation, even if they reside in Italy.
AVS contributions are compulsory for people engaged in gainful employment in Switzerland, including cross-border workers. For employees, contributions are deducted by the employer and paid, together with the employer’s share, to the competent AHV compensation office.
However, this does not mean that the worker’s entire future pension provision is managed by a single institution.
It is more accurate to distinguish between:
- First pillar: primarily AVS/AI .
- Second pillar: occupational pension provision under the LPP and the associated pension fund.
- Third pillar: private individual pension provision.
- Any insurance periods accrued in Italy: these may be relevant to pension coordination between Italy and Switzerland.
AHV: The First Pillar of the Swiss Pension System
The AVS (Old-Age and Survivors’ Insurance) is the first pillar of the Swiss social security system.
Its purpose is to provide basic coverage in old age and, under certain conditions, for survivors. Together with disability insurance (IV) and supplementary benefits, it forms the first pillar of the Swiss system.
For cross-border workers, one important practical consideration is ensuring that contributions are correctly recorded.
The compensation office maintains an Individual Account (IA), which records income subject to contributions. Workers can request a statement of their individual account to check that their employment periods and contributions have been recorded correctly.
Why Should You Check Your AHV Individual Account?
Regular checks can help identify missing periods or discrepancies in contribution records at an early stage.
For example, someone who lives in Italy and works in Switzerland for several years may change employers during their career. In this situation, it is advisable to check that their AVS contribution record is complete and properly documented.
This check does not replace professional pension advice, but it helps ensure that the worker’s position can be reconstructed more easily when retirement approaches.
BVG and the Pension Fund: The Second Pillar
Alongside the AVS, Switzerland has an occupational pension scheme, generally referred to as the LPP or the second pillar.
Occupational pension provision is intended to supplement the first pillar and help maintain an appropriate standard of living after retirement. It also covers certain risks associated with disability and death.
Under the mandatory scheme, employees already insured under the first pillar are subject to occupational pension insurance if they meet the statutory salary threshold. For 2025 and 2026, the threshold specified by the Swiss federal authorities is CHF 22,680 per year.
However, it is important not to confuse the LPP with the AVS.
The AVS is administered through compensation offices, whereas the second pillar is managed by the pension institution or pension fund with which the employer is affiliated.
The Third Pillar
The third pillar is a voluntary form of individual pension provision that can supplement the first and second pillars.
It is divided primarily into:
- Pillar 3a: restricted individual pension provision.
- Pillar 3b: flexible individual pension provision.
Pillar 3a is available to individuals earning income from gainful employment that is subject to AVS contributions. This includes people who live abroad but work in Switzerland and are subject to the Swiss social security system.
Pillar 3b offers greater flexibility but does not provide the same Swiss tax advantages associated with pillar 3a.
Italy and Switzerland: Are Pension Contributions Aggregated?
Yes, but it is important to understand what this actually means.
International social security coordination allows insurance periods accrued in different countries to be taken into account, under certain conditions, when determining entitlement to benefits.
However, this does not mean that contributions are physically transferred from Italy to Switzerland or vice versa.
The international aggregation of insurance periods does not involve transferring contributions between countries. Instead, periods accrued in different countries may be used to establish entitlement to a pension in accordance with the applicable coordination rules.
Example: A Career Spanning Italy and Switzerland
Consider someone who:
- Works in Italy for 15 years;
- Subsequently works in Switzerland for 20 years;
- Resides in Italy when they retire.
The Italian and Swiss insurance periods may be taken into account under international pension coordination rules when determining entitlement to benefits.
However, the result is not a single “Italian-Swiss pension”. Benefits are determined under the rules of the respective pension systems.
Be Careful When Working Remotely from Italy
The situation can become more complex for cross-border workers who perform part of their work remotely from Italy.
In general, coordination rules determine which country’s social security legislation applies when someone works in more than one country. Therefore, it should not be assumed that having a Swiss employer automatically means that Swiss social security legislation will always apply exclusively.
A multilateral framework agreement on cross-border telework also allows, subject to specific conditions, cross-border workers in Italy to work remotely from Italy for up to 49.9% of their working time while remaining subject to the social security system of the employer’s country. This arrangement has applied to Italy since 1 January 2024.
Specific conditions and procedures must be met, including obtaining an A1 certificate.
Consequently, anyone planning a permanent change to their working arrangements should check their social security position before starting cross-border telework.
What Should Cross-Border Workers Check During Their Careers?
Pension arrangements should not be reviewed only when retirement approaches.
It is advisable to retain and periodically check:
- AVS Individual Account statements;
- Certificates and documentation from the LPP pension fund;
- Any documents relating to vested benefits accounts or policies;
- Third-pillar documentation;
- Certificates confirming employment periods in Italy;
- Documents relating to changes of employer;
- Any A1 certificates issued in connection with secondment or cross-border telework.
This documentation can be particularly useful for people who have changed employers several times, alternated between working in Italy and Switzerland, or performed part of their work remotely.
The Principle of a Single Applicable Social Security Legislation
When someone works in more than one country, the relevant institutions apply European coordination rules to determine which country’s social security legislation is applicable. This determination is documented through the A1 certificate, following the relevant procedures involving the social security institution responsible for the worker’s country of residence.
The applicable legislation depends on:
- The type of work performed, whether employed or self-employed;
- The proportion of work carried out in each country.
The document used to certify the applicable social security legislation is Form A1.
The certificate must be requested from the competent social security institution in accordance with the applicable rules, generally involving the institution in the worker’s country of residence.
Examples
Subject to exceptions provided for under the applicable legislation:
- I live in Italy and work exclusively in Switzerland: Swiss social security legislation applies.
- I live in Italy, work full-time as an employee in Switzerland and am self-employed in Italy: Swiss legislation applies in the circumstances described; consequently, contributions calculated on my Italian self-employment income will be payable to the competent Swiss social security institution.
- I live in Italy, work as an employee in Switzerland for 20% of my working time and as an employee in Italy for 60%: Italian legislation applies; the Swiss employer will therefore need to establish a social security position in Italy.
An Important Distinction: Social Security and Taxation Are Not the Same
For cross-border workers between Italy and Switzerland, tax and social security matters are related but distinct.
Terms such as “old cross-border worker” and “new cross-border worker”, for example, are relevant to the tax treatment of employment income and the agreements between Italy and Switzerland. They should not automatically be used to determine which social security system applies.
Social security coverage must instead be assessed by examining the actual working arrangements: the country or countries where the work is performed, the worker’s residence, any employment in multiple countries, secondment, telework and the characteristics of the employment relationship.
In these situations, a preliminary review of the worker’s position can help prevent errors that may be difficult to correct later.
Frequently Asked Questions
Does a cross-border worker residing in Italy pay AVS contributions?
As a general rule, yes, if they work in Switzerland in an activity subject to the Swiss social security system. The AHV also covers cross-border workers.
Does a cross-border worker also have a pension fund?
If the requirements under the BVG are met, the employee is subject to mandatory occupational pension insurance and is affiliated with the employer’s pension institution.
Are Italian pension contributions transferred to Switzerland?
No. International coordination allows insurance periods accrued in different countries to be taken into account under the applicable rules, but it does not involve the physical transfer of contributions between countries.
Can a cross-border worker have a third-pillar 3a account?
Yes. People who live abroad but work in Switzerland and earn income subject to AVS contributions may qualify to establish a pillar 3a arrangement.
If I change Swiss employers, do I lose my second-pillar pension savings?
No. The pension assets accrued are not simply lost. However, it is necessary to check that they are correctly transferred to the new pension institution or, where applicable, allocated to a vested benefits arrangement.
Where should I submit my pension application if I have worked in both Italy and Switzerland?
This depends on the individual’s pension position and country of residence. For residents of Italy who have also accrued insurance periods in Switzerland, INPS provides a specific procedure for pension applications under the EU coordination system.
If I work from Italy for a Swiss employer for a few days, does my social security coverage change?
It may, because working in more than one country requires an assessment of the applicable social security rules. Specific provisions govern cross-border telework from Italy, but the relevant conditions and procedures must be met.
Conclusion
For cross-border workers, understanding the Swiss pension system primarily means knowing where contributions are paid, which institution manages each pension position and how employment periods accrued in Italy and Switzerland are taken into account.
The AVS, LPP and third pillar serve different purposes and should not be confused. Similarly, INPS, AVS compensation offices and pension funds are separate institutions with different responsibilities.
Regularly reviewing your pension position can be particularly useful when changing employers, working in both countries or engaging in cross-border telework.
Studio Barbara Antonini provides dedicated tax and social security consultancy services for cross-border workers between Italy and Switzerland, with particular attention to the specific issues arising from the relationship between the two countries.
