BVG Contributions Switzerland (CH) – Guide
Understand BVG/LPP contributions in Switzerland: mandatory vs extra-mandatory savings, insured salary, and why contribution rates increase with age.
- Mandatory vs extra-mandatory: what BVG requires and what employers can add.
- Age-dependent rates: why BVG deductions increase as you get older.
- Insured salary matters: thresholds and coordination deduction change the base.
BVG (German) / LPP (French) is Switzerland’s occupational pension (Pillar 2). If you are an employee above the legal entry threshold, both you and your employer pay contributions into a pension fund. Over time, these contributions build your retirement capital.
This guide explains how BVG contributions work in practice: what part is mandatory, what is extra-mandatory, how your insured salary is calculated, and why your contribution rate usually rises with age.
1. What are BVG contributions?
BVG contributions are payments into your pension fund under Pillar 2. They typically include savings contributions (building retirement capital) and risk contributions (financing disability and survivors’ benefits), depending on the fund’s structure.
Pillar 2 is designed to help you maintain your standard of living in retirement — together with AHV (Pillar 1). If you want the system overview: Pillar 2 (BVG) Explained.
2. Mandatory vs extra-mandatory BVG
BVG has a mandatory part defined by law (minimum coverage). Many employers offer an extra-mandatory plan (sometimes called “überobligatorisch”) that insures more salary and/or provides better benefits.
| Part | What it means | Why it matters |
|---|---|---|
| Mandatory BVG | Minimum legal pension coverage | Standard rules apply (e.g., minimum benefits) |
| Extra-mandatory | Coverage beyond the legal minimum | Employer plan can improve pension outcomes |
Deep dive: BVG Extra-Mandatory Benefits
3. Who pays: employee vs employer
BVG contributions are usually shared between employer and employee. As an employee, you’ll see your share deducted on your payslip. Employers must contribute at least the same amount as employees (or more, depending on the plan).
If your BVG deduction suddenly changes, check whether it’s due to age bracket, salary changes, or a pension plan change. Your HR/pension fund statement usually clarifies this.
4. Insured salary, entry threshold & coordination deduction
BVG contributions are not calculated on your full salary. They are based on your insured salary. Two important concepts determine whether and how much of your salary is insured:
- Entry threshold: minimum salary required to be insured under BVG.
- Coordination deduction: a deduction used to coordinate BVG with AHV (reduces the insured salary base).
Related guides: BVG Entry Threshold · Coordination Deduction BVG
Part-time work can create disadvantages because the insured salary base may be lower. See: BVG for Part-Time Workers.
5. Age-dependent contribution rates (why they rise)
In many BVG plans, contributions increase with age. The idea is to boost savings later in your career, when income is often higher and retirement is closer.
| Why contributions rise with age | What it means for you |
|---|---|
| More retirement savings close to retirement | Higher deductions on your payslip in later years |
| Risk profile and benefits change | Some plans adjust risk/savings mix |
| System design (standard BVG logic) | Late-career years matter a lot for final pension |
When budgeting, expect BVG deductions to rise over time. If you track your net income and fixed costs, include a buffer for higher pension contributions in later career years.
6. What you should check on your pension fund statement
Your pension fund statement (often annual) shows your insured salary, savings balance, projected retirement benefits, and key plan parameters. It is the fastest way to understand your personal BVG situation.
Step-by-step reading guide: Pension Fund Statement (CH)
- Is the insured salary correct?
- Do you have a gap / buy-in potential?
- Which part is mandatory vs extra-mandatory?
- What are the projected benefits at retirement?
7. Tips to improve your Pillar 2 outcome
You can’t choose your pension fund freely as an employee, but you can still optimize outcomes with smart decisions:
- Close gaps: consider voluntary buy-ins (if it fits your tax and withdrawal strategy).
- Understand plan quality: compare conversion rates, extra-mandatory coverage, and performance.
- Plan job changes: know what happens to your assets when changing employer.
Useful next reads: Buy-In to Pension Fund (Einkauf) · Pension Fund Comparison · Switch Pension Fund (Employer Change)
8. FAQ: BVG contributions
Why are my BVG deductions higher this year?
Common reasons include moving into a higher age bracket (age-dependent rates), salary changes, or changes to your employer’s pension plan. Check your pension fund statement for the insured salary and contribution details.
What is “extra-mandatory” BVG?
Extra-mandatory BVG is pension coverage beyond the legal minimum. Employers often provide it to insure higher salary parts and offer better benefits. More details: BVG Extra-Mandatory Benefits.
Can I pay more into BVG voluntarily?
In many cases yes, via voluntary buy-ins (“Einkauf”) if you have a contribution gap. These can have tax benefits but also restrictions. Guide: Pension Fund Buy-In (CH).
See your BVG in your full retirement plan
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