The BVG (Berufliche Vorsorge / LPP in French) is the second pillar of the Swiss pension system. Employees with annual salary above the entry threshold (CHF 22,680 in 2026) are automatically enrolled by their employer in a pension fund (Pensionskasse / Caisse de pension). Contributions accumulate as personal pension capital.
Age-graded contribution rates increase over time: 7% of insured salary at age 25–34, 10% at 35–44, 15% at 45–54, and 18% at 55 to retirement. The employer must pay at least half. Insured salary is gross salary minus the AHV coordination deduction (CHF 26,460 in 2026), capped at CHF 90,720.
On retirement, the accumulated capital can be drawn as a lifelong annuity (using the BVG conversion rate, currently 6.8% on mandatory savings), as a lump sum, or as a mix. The capital can also be withdrawn early to buy a primary residence, start a business or leave Switzerland.
Annual BVG pension ≈ Accumulated capital × Conversion rate (6.8% mandatory part)
An employee accumulating CHF 500,000 in their pension fund at retirement receives a lifelong annuity of about CHF 34,000 per year (CHF 500,000 × 6.8%), or can take part of it as a one-off lump-sum payment.