Pension Fund Comparison (CH)
Want to compare Swiss pension funds (BVG/LPP) properly? Learn the key metrics that matter—conversion rate, costs, funded ratio, interest credited, and extra-mandatory rules—so you can evaluate pension fund quality beyond marketing.
- Conversion rate isn’t everything—but it’s a crucial retirement lever.
- Mandatory vs extra-mandatory rules can change your outcome dramatically.
- Use your pension statement + fund factsheet to compare apples to apples.
You usually don’t “choose” your pension fund directly—your employer does. But you can compare pension funds when evaluating job offers, switching employers, or deciding how much to rely on BVG versus pillar 3a.
This guide gives you a practical framework to evaluate Swiss pension funds using measurable factors: conversion rate, credited interest, costs, funding status, and the rules for extra-mandatory benefits.
New to BVG? Start here: Pillar 2 (BVG) Explained
1. What “pension fund comparison” really means
A pension fund comparison is not about finding a single “best” fund. It’s about understanding: How much salary is insured, how much is contributed, how assets grow, and how retirement benefits are converted.
- Employer plan quality: insured salary rules, employer contribution share, extra benefits.
- Fund outcomes: credited interest, costs, stability and funding.
- Your personal impact: projected pension and your pension gap.
2. The 6 key metrics to compare (CH)
If you only compare one number, you’ll miss the bigger picture. Use this set of metrics:
| Metric | Why it matters | Where to find it |
|---|---|---|
| Conversion rate | Determines how capital becomes annual pension (annuity) | Pension fund regulations, statement projection |
| Insured salary rules | Drives contributions; can be worse for part-time/multiple jobs | Plan summary, statement |
| Contribution levels | Employer vs employee share affects how fast assets grow | Statement, plan overview |
| Interest credited | Impacts capital growth; mandatory vs extra-mandatory can differ | Statement (credited interest) |
| Costs | Fees reduce returns over time (often overlooked) | Annual report, plan disclosure |
| Funding status / stability | Underfunding can trigger measures (e.g., lower interest, higher contributions) | Annual report, fund facts |
You’ll use these metrics in the checklist in section 7.
3. Conversion rate explained (and why it matters)
The conversion rate (Umwandlungssatz) is a percentage used to convert your retirement capital into an annual pension. For example, a 6.0% conversion rate would mean CHF 100,000 capital → CHF 6,000 annual pension (simplified).
- It’s a “multiplier” at retirement—small differences can change your yearly pension for life.
- Mandatory vs extra-mandatory: extra-mandatory conversion rates can be lower than the mandatory BVG rate.
- It affects withdrawal strategy: lump sum vs annuity decisions depend on conversion conditions.
Related: BVG Pension Calculation · Lump Sum vs Annuity (CH)
4. Interest credited: minimum vs fund policy
For mandatory BVG assets, there is a legally defined minimum interest rate. But many pension funds credit different rates on extra-mandatory assets, and in good years may credit more than the minimum overall.
- Credited interest over multiple years (not just one year).
- Separate rates for mandatory vs extra-mandatory (if disclosed).
- Transparency: does the fund clearly explain how interest is decided?
Read: BVG Minimum Interest Rate · BVG Extra-Mandatory Benefits
5. Costs and administration: the silent killer
Costs are often invisible in everyday life, but over decades they reduce the net return credited to members. A fund can have decent performance and still deliver mediocre outcomes if costs are high.
- Administration costs (per insured person).
- Asset management costs (investment fees, mandates, TER-like costs).
- Risk costs (death/disability coverage structure).
If you can’t find costs easily, that’s also a signal—good funds usually publish clear annual reports.
6. Extra-mandatory benefits: where differences explode
Many “pension fund differences” come from extra-mandatory rules: better insured salary definitions, higher employer contributions, better interest crediting, and different conversion rates.
- Insured salary calculation: coordination deduction adjustments or better part-time treatment.
- Employer contribution share: some employers fund a much bigger portion.
- Conversion rate policy: can be significantly lower than mandatory.
- Flexibility at retirement: options for partial retirement, early/late retirement.
Part-time impact: BVG for Part-Time Workers
7. Quick comparison checklist (job offer / employer change)
- Pension plan summary (insured salary, contributions, benefits)
- Pension fund regulations (conversion rates, retirement options)
- Latest annual report / key figures (funding ratio, costs, performance)
- Insured salary: how much of salary is actually insured?
- Employer contributions: how generous is the employer share?
- Conversion rates: mandatory vs extra-mandatory rules.
- Credited interest history: 3–5 year view if available.
- Costs + funding stability: any red flags?
When switching employers, your assets move into vested benefits: Vested Benefits Account (Freizügigkeit)
8. FAQ: pension fund comparison Switzerland
What is the most important metric to compare Swiss pension funds?
There isn’t only one. Conversion rate matters a lot at retirement, but you should also compare insured salary rules, contribution levels, credited interest, costs, and funding stability—especially for extra-mandatory benefits.
Why do pension funds differ if BVG is regulated?
BVG sets minimum rules for the mandatory part, but many differences come from extra-mandatory benefits: insured salary definition, contribution generosity, interest policy, and conversion rates.
Can I choose my pension fund in Switzerland?
As an employee, usually not—your employer chooses the pension fund. But you can compare funds when evaluating job offers or switching employers, and adjust your personal retirement strategy (e.g., with pillar 3a) based on your BVG situation.
Where can I find conversion rate and credited interest for my fund?
Your pension fund statement often shows projections and credited interest, and the pension fund regulations or annual report usually disclose conversion rates and key figures. If unclear, ask HR or the fund directly.
How does pension fund comparison affect my retirement plan?
It helps you estimate future pension income and identify gaps early. If your BVG plan is less generous, you may rely more on pillar 3a, buy-ins, or other strategies to close the pension gap.
Compare your pension outcomes in BudgetHub
Import your pension figures, track your retirement budget, and see how BVG + AHV + pillar 3a combine—so you can spot gaps early and optimise your plan.
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