BVG (pension fund)
The second pillar of occupational pension provision — the pension fund. Mandatory from a certain annual salary; it supplements the AHV (state old-age pension, 1st pillar) so that your usual standard of living is secured in old age. Contributions are shared between employer and employee.
BVG (occupational pension, the Pensionskasse) is the second pillar of the Swiss pension system. Together with the AHV first pillar, it aims to let you keep your accustomed standard of living after retirement. It is compulsory for employees once their annual salary with one employer exceeds CHF 22'050, and contributions are shared between employer and employee, with the employer paying at least half.
Example: An employee with a CHF 80'000 annual salary is insured under her employer's pension fund. Each month a percentage of her coordinated salary is deducted for BVG, the employer adds at least the same again, and the combined savings accumulate in her individual retirement account.
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About the glossary
When is BVG mandatory in Switzerland?
Occupational pension (BVG) becomes compulsory once an employee earns more than CHF 22'050 per year with a single employer (the entry threshold). Below that amount, and for most self-employed people, BVG is voluntary.
Who pays into the pension fund?
Both the employer and the employee. The law requires the employer to cover at least half of the total contribution; many companies pay more. Contributions rise with age in defined retirement-credit bands.