Your Swiss pension fund (Pillar 2), explained
How Pillar 2 builds up: the entry threshold, the coordination deduction, retirement credits by age, the conversion rate, and how to read your pension certificate.
In one line: The AHV pays out of today's contributions; your pension fund saves in your own name — and the certificate it sends each year contains every number that matters.
Pillar 2, the occupational pension (BVG), sits on top of the AHV. Together they are meant to cover roughly 60% of your final salary. This guide explains how the balance builds up and how to read your annual certificate.
Who is insured, and on what part of the salary
You are covered by the mandatory scheme once your annual salary with one employer exceeds the entry threshold of CHF 22'680.
Crucially, you are not insured on your whole salary. The coordination deduction of CHF 26'460 is subtracted first, because the AHV already covers that portion. What remains is the insured (coordinated) salary, and only that part earns pension credits.
Under the mandatory scheme, salary counts up to CHF 90'720. So the largest coordinated salary the mandatory scheme insures is CHF 90'720 − CHF 26'460 = CHF 64'260.
Two consequences catch people out:
- A modest salary is insured on much less than it earns. On a CHF 60'000 salary, the insured portion is CHF 33'540 — a little over half.
- Part-time work is hit hardest, because the deduction is a flat amount, not a percentage. Several small jobs can each fall under the threshold and insure nothing at all, even though they add up to a decent income.
How the balance grows
Each year, a percentage of your insured salary is credited to your account. That percentage — the retirement credit — rises with age:
| Age | Retirement credit |
| --- | --- |
| 25–34 | 7% |
| 35–44 | 10% |
| 45–54 | 15% |
| 55–65 | 18% |
Your employer pays at least half of the total contribution. The accumulated balance also earns interest; on the mandatory portion the Federal Council sets a minimum rate, which is 1.25% for 2026.
The practical effect of the rising scale is that the last ten working years build the balance far faster than the first ten. It is also why stopping work early costs more than the missing years alone suggest.
Mandatory and extra-mandatory
The law defines a minimum. Many funds insure more than that — higher salaries, or better benefits — and this extra part is called extra-mandatory (überobligatorisch).
The distinction matters at retirement, because the two parts can be converted at different rates.
The conversion rate
At retirement, your balance is turned into an annual pension by multiplying it by the conversion rate. The legal minimum on the mandatory portion is 6.8%: a mandatory balance of CHF 100'000 produces about CHF 6'800 of pension per year, for life.
On the extra-mandatory portion, funds set their own rate, and it is typically lower. A fund quoting one blended rate across both parts is quoting an average, not a legal guarantee.
Reading your certificate
Your fund sends a certificate (Vorsorgeausweis) once a year. Four figures carry most of the meaning:
- Current retirement assets — what you have today.
- Projected retirement assets — what the fund expects at 65, usually assuming an unchanged salary.
- Projected pension — that balance times the conversion rate.
- Maximum buy-in (Einkaufspotenzial) — the gap you are allowed to fill voluntarily, which is also tax-deductible.
The certificate also states survivor and disability benefits. Under the mandatory scheme, a surviving spouse's pension is 60% of the insured person's pension and an orphan's pension 20%, subject to the conditions in the fund's rules.
Common questions
Is the pension fund compulsory?
For employees, yes, once annual salary with one employer exceeds CHF 22'680. Self-employed people are not automatically covered but can join voluntarily.
Why is my insured salary lower than my actual salary?
Because the coordination deduction of CHF 26'460 is subtracted first — that part is considered already covered by the AHV. Only the remainder earns pension credits.
What is the conversion rate?
The factor that turns your accumulated balance into an annual pension. The legal minimum is 6.8% on the mandatory portion; funds may apply a lower rate to the extra-mandatory portion.
Does my employer have to pay half?
At least half of the total contribution, yes. Many employers pay more than the legal minimum.
Sources: BVG (SR 831.40), in particular Art. 2 and 7–8 (compulsory insurance, coordinated salary), Art. 14–16 (conversion rate and retirement credits), Art. 19–20 (survivors' benefits) and Art. 66 (employer share); BVV 2 (SR 831.441.1); Federal Social Insurance Office (BSV) key figures for 2026.
Educational information, not financial advice. Figures are for 2026 and may change.