Switzerland runs a three-pillar system: the state AHV/AVS (1st pillar), mandatory occupational pensions/BVG (2nd pillar), and private savings (3rd pillar). The totalization agreement coordinates only the 1st pillar with U.S. Social Security — contributions of roughly 10.6% of pay split with the employer, and a minimum of one full year of contributions to qualify for a Swiss pension.
U.S. retirement benefits normally need 40 quarters (10 years) of credits. If you split a career between the U.S. and Switzerland, you might fall short in each country alone. As long as you have at least 6 quarters of U.S. credits, the agreement lets you add your Switzerland credits to reach eligibility — the U.S. then pays a benefit pro-rated to your U.S. credits only.
A Certificate of Coverage is the document that proves you're exempt from one country's social security. For U.S. coverage, the employer requests it from the SSA Office of Earnings & International Operations. Switzerland's authority issues the equivalent when Switzerland covers you.
Under the U.S.–Switzerland agreement, a worker sent by a U.S. employer for 5 years or less normally stays under U.S. Social Security only and is exempt from Switzerland's system. Your employer obtains a U.S. Certificate of Coverage as proof. Beyond 5 years, coverage shifts to Switzerland.
Yes. If you have at least 6 quarters (about 1.5 years) of U.S. credits, the agreement lets you combine ("totalize") your U.S. and Switzerland credits to reach the 40-quarter (10-year) threshold for a pro-rated U.S. retirement benefit.
The agreement has been in force since 1980.
Pension taxation depends on Switzerland's domestic law and the separate U.S.–Switzerland income tax treaty (if any), not the totalization agreement. The totalization agreement only governs which country's social security system covers you and how credits combine. Confirm pension taxation with a cross-border tax advisor.
No. The agreement coordinates the state AHV/AVS system only. Your BVG occupational account is separate: it stays vested, and on a permanent move to the U.S. (a non-EU/EFTA country) a cash-out of vested benefits is often possible under Swiss rules — evaluate that with Swiss and U.S. tax advice, independent of totalization.