BVG (Berufliche Vorsorge) is Switzerland's mandatory occupational pension — the second of the country's three retirement pillars. Unlike AHV, which is state-run and pay-as-you-go, BVG is fully funded: your contributions sit in an individual account inside a pension fund (Pensionskasse), grow over time, and are paid out to you at retirement or when you permanently leave Switzerland.
BVG is organized and administered entirely by your employer. You don't choose your pension fund, you don't manage the contributions, and you don't fill in any forms — it happens automatically from the month you meet the entry threshold.
Mandatory above CHF 22,680/year
How contributions work
Only part of your salary is insured under BVG — the coordinated salary. This is your gross salary minus the coordination deduction of CHF 26,460 (2026), down to a maximum insured salary of CHF 88,200.
| Age | Minimum BVG contribution rate |
|---|---|
| 25–34 | 7% of coordinated salary |
| 35–44 | 10% |
| 45–54 | 15% |
| 55–65 | 18% |
Your employer must contribute at least as much as you do. Many employers contribute more — often 60% employer, 40% employee. Check your employment contract or ask your HR department for the exact split.
The BVG is a minimum — most funds do more
What the money is invested in
Your Pensionskasse invests your contributions in a diversified portfolio (bonds, equities, real estate, alternatives) and credits a minimum interest rate set annually by the Federal Council. In 2026 the mandatory minimum is 1.25%. Many funds exceed this in good years.
What you receive at retirement
At retirement (age 65), you can take your BVG savings as:
- Monthly pension — your accumulated capital multiplied by the conversion rate. The mandatory BVG conversion rate is 6.8% (i.e., CHF 100,000 saved = CHF 6,800/year = CHF 567/month). Note: the Federal Council regularly debates lowering this rate.
- Lump sum — many pension funds allow you to take 25–100% of the over-mandatory portion as a one-time cash payment. This is taxed separately at a preferential rate.
- Mixed — part lump sum, part monthly pension.
Leaving Switzerland early: what happens to your BVG?
This is one of the most common questions from expats. When you leave Switzerland permanently:
- Leaving for an EU/EFTA country: You can only cash out the over-mandatory portion. The mandatory BVG portion must be transferred to a Swiss vested benefits foundation (Freizügigkeitsstiftung) and stays locked until retirement age. At 65, it's paid out as a lump sum regardless of where you live.
- Leaving for a non-EU/EFTA country: You can cash out the entire balance — both mandatory and over-mandatory portions. This is taxed at a reduced lump-sum rate at the canton of your pension fund.
Don't forget your vested benefits accounts
Disability and death coverage
BVG isn't just retirement savings — it also provides:
- Disability pension — if you can no longer work due to illness or accident, BVG pays a disability pension (in addition to IV from the first pillar).
- Survivors' pension — in the event of death, your spouse receives 60% of your projected pension; children receive 20% each.
These risk coverages are why BVG contributions don't feel "wasted" during working years — you're buying insurance as well as building savings.
Self-employed and BVG
Self-employed individuals are not required to join a BVG pension fund. They can join voluntarily (through their industry association's fund) or rely exclusively on AHV and Pillar 3a for retirement. Most financial advisors recommend joining a BVG fund if your income is stable — the tax deduction on contributions is substantial.
Key documents to request
- Your annual Pensionskasse certificate (Vorsorgeausweis) — shows your current savings, projected pension, and risk coverage.
- Your fund's annual report — shows investment returns and coverage ratio (Deckungsgrad). A ratio below 100% is a warning sign.
Questions about how BVG affects your overall retirement picture? Run our free risk analysis for a personalised overview.