After much research and phone calls to various Swiss compensation offices, the final answer I received is this: If you worked in the USA and paid into US Social Security, these payments are NOT recognized by Switzerland, and will NOT be taken into account when applying for Swiss state retirement benefits. Strangely, it works in the other direction: US Social Security recognizes Swiss AHV contributions in their benefits calculation. Unfortunately, I worked too short in the USA (10 years) to qualify for any US Social Security benefits, so it’s money I paid in for nothing.
This situation is anything but clear when reading the official agreement between the US and Switzerland concerning recognition of social insurance
Bottom line for me: upon retirement I will receive about 15% less in AHV due to the missing years.
I will also not receive any social security benefits from the US. I think there are a number of us in the same boat (not to mention, I only had a pension plan for 1/6th of my time there, so nothing to show for it).
So! If one qualifies for social security, all the years and contributions to AHV will be accounted for? Also assume that one must decide to collect either from US SSA or AHV, but not both?
Yes.. by US Social Security (apparently). But you have to request and fill out the long forms from the Swiss SVA who then coordinate with the US Social Security.
I am not the expert, I assume there are two possibilities:
- Submit the forms for recognition of your AHV contributions then collect ONLY from US Social Security
- Don't say anything and collect from both, assuming you paid in enough in both systems to collect from both. As I don't think they talk to each other, how would they even know, and why would they care?
Nope. So I lost the money I paid in over 10 years in the US, and more significantly will receive a reduced AHV (2.2% less for every missing year below 45 yrs) for the remainder of my life due to the years not paid in here. Them's the breaks.
Yes, this is normal. The systems are not compatible but most likely you collect from both. I think per the SS agreement if you don't have enough years in either system to qualify for a pension, they can take years from the other into account, but this is the exception, not the norm. The number of years to qualify for a pension under the Swiss system is really low, like three years or so, even if that only gives you a few peanuts, I think that's why it is very rare for the Swiss side to import SS years cause most already qualify.
Not sure why you don't qualify for US SS?
Last I knew it was 40 credits for full qualification, that is 4 credits you earn per year, so I am fully covered by SS with about 10 years of work in USA. Don't you get annual SS benefit form? In some years it was automatically sent, other years you can request it. It gives all your earnings, estimated benefits including qualifying for disability.
If I read this section “Where the insurance periods completed in the United States do not entitle an individual to a US pension (up to 10 years insurance may be required), the insurance periods completed in Switzerland are taken into account (totalization) provided that they do not overlap with the periods recognized as insurance periods under US legislation. In any event, an individual must have at least a year and a half insurance cover in the United States (6 trimesters)”.
As well as this section: "Taking into account Swiss insurance periods (totalization) facilitates a person’s entitlement to US benefits, regardless of the person’s nationality. If a benefit that is due under US social security legislation depends on a certain minimum insurance or contribution period, the periods completed in Switzerland are taken into account, to give rise to an entitlement to benefits […] However, the calculation and the amount of a pension from one of the contracting States are determined solely by the contributions paid in that State.
the “years of payments” in the US may not count towards your AHV entitlement, however, the years of payments in Switzerland, should count towards whether you are entitled to a US pension.
That's what I said. US Social Security takes AHV contributions into account if you choose to take benefits from the US. Swiss AHV doesn't give a toss about what you paid into US Social Security. They only care about what you contributed into the AHV. Period.
This means that if you contributed, say, 5 years in the US and 15 years in Switzerland, you are now eligible to a US pension based on those 5 years and Swiss pension based on 15 years.
Without the bilateral agreement you would not get the 5 US years, as it is normally too short a period of contributions to count for a pension.