The second pillar of the Swiss pension system is the Swiss Occupational Pension Fund or BVG. The scheme acts as an insurance fund for retirees and is meant to make retirement comfortable and sustainable. Alongside the Old-Age and Survivors’ Insurance (OASI), it is mandatory for most employees to contribute to a BVG scheme.
What is the Swiss BVG pension?
The Swiss Occupational Pension Fund or BVG is a scheme under which your employer must contribute a portion of your gross salary to a pension fund. Once you reach retirement age - 65 years for men and 64 years for women (65 years for women from 2028) - you are entitled to a portion of the assets accrued over your working life.
Who pays into the BVG second pillar pension?
The BVG pension scheme is mandatory for all workers in Switzerland who earn more than 22.050 francs a year. Contributions are made from the age of 17 (if working) until the point when the scheme is cashed out. Employers and employees each pay 50 percent of second pillar contributions, with the amount deducted automatically from the employee’s payslips.
Those who earn less than 22.050 francs a year are still able to voluntarily contribute to the scheme. Freelancers and those on temporary work contracts lasting less than three months are also exempt from the scheme, but can (and are encouraged to) contribute to the BVG - though for self-employed people, it is often more lucrative to take out a private pension plan.
BVG pension contributions
Typically, an employer has to make a pension contribution based on your age, salary and the time you have spent in Switzerland. This contribution is generally taken from the portion of your salary that falls between 22.050 Swiss francs and 88.200 Swiss francs (as of 2025), but companies can voluntarily set a higher upper limit. These contributions vary by canton but can be broadly summarised as:
- Ages 25 to 34 contribute 7 percent of gross salary
- Ages 35 to 44 contribute 10 percent of gross salary
- Ages 45 to 54 contribute 15 percent of gross salary
- Ages 55 to 65 contribute 18 percent of gross salary
Can I pay more into a BVG pension?
Some expats may come to Switzerland in later life and therefore not have as much time to build up a sufficient pension through the BVG scheme as those who are younger. That is why many BVG pension providers allow you to invest money from elsewhere into the scheme. To find out more, contact your pension provider for more details.
Can I choose which BVG pension fund I use?
Typically, the employer will choose where BVG contributions are sent for all employees. Freelancers can freely choose their own pension fund.
What happens to my occupational pension if I switch jobs?
If you switch jobs or return to work after a period of unemployment, any previous contributions made to your BVG pension will be transferred to your new employer’s provider either via your previous provider or a vested benefits account.
If your new job has a higher salary, or the pension fund allows you to contribute more to your pension than your previous provider, you are able to top up your BVG using additional voluntary contributions (AVCs). Contact your pension provider for more details.
How are Swiss BVG pensions calculated?
Swiss BVG pension payments are determined by the value of the contributions made during your working life and the performance of the pension fund you or your employer has chosen. The amount you receive is based on the percentage conversion rate used by your provider. Swiss law sets the minimum conversion rate at 6,8 percent.
For instance, if your BVG pension has accrued 400.000 Swiss francs over your working life, and your pension provider has a conversion rate of 6,8 percent, payments should be set at 27.200 francs a year, or 2.266 francs a month.
Pension providers often allow you to cash out all or part of your BVG pension as a lump sum, with the remainder given as a monthly pension. If cashed out monthly, BVG is treated as income and subject to income taxes.
Applying for your BVG pension
Once you choose to retire, second-pillar pensions can be applied for through your BVG pension fund, which will then start to pay out your pension either directly or as part of your payslip (if you are still working). Most providers will pay out your pension in monthly instalments, though some may offer to pay out part of your pension savings as a lump sum.
Can I claim my Swiss BVG pension early or delay retirement?
It is generally possible to delay receiving your Swiss BVG pension in order to build up further savings. You can only cash in your BVG pension early under certain circumstances.
Early payout of BVG pension in Switzerland
Whether you are able to claim your BVG pension early is decided by which pension fund you or your employer have chosen. In cases where early retirement is possible - some providers allow you to claim from the age of 58 - there are typically restrictions on benefits or smaller payouts.
If you become self-employed and do not want to pay into a BVG scheme, you are able to cash all the funds out under the following criteria:
- You submitted an application to withdraw the funds within a year of becoming self-employed.
- If married or in a civil partnership, you have the consent of your spouse or partner.
- You have proof that you are going to be self-employed, such as an extract from a commercial register.
Late retirement under BVG scheme
In a similar vein, many pension providers also allow you to delay retirement past the official retirement age, typically until age 70. Those who work beyond retirement age are entitled to more lucrative benefits.
Can I use my BVG pension savings before I retire?
Under Swiss law, you are able to use the BVG pension savings you have accrued to help buy a house, pay off a mortgage or acquire shares in housing cooperatives. However, several requirements need to be met:
- The house you buy must be your primary residence.
- If you are married or in a civil partnership, you must have the consent of your spouse or partner.
- You must only withdraw the funds once every five years.
Those younger than 50 years old are able to use their full BVG pension contributions to purchase property, while those aged 50 years and over may only use an amount specified by their provider. In addition, if you sell the property, you must pay the money back into your BVG pension.
Who inherits my Swiss BVG pension?
The Swiss BVG pension can be inherited, depending on the policy chosen by the employer. Where a policy can be inherited, spouses and partners of the deceased will continue to receive the pension in the event of the retiree’s death, so long as they are at least 45 years old and the marriage/partnership has lasted for at least five years.
For more information, contact your pension provider.
Drawing a Swiss BVG pension abroad
If you move to a nation that is within the EU and EFTA, or to a country which has a social security agreement with Switzerland, you can cash out all non-obligatory payments made to the BVG. All mandatory benefits paid by you and/or your employer will be reinvested into the pension system of your new country of residence, or put into a vested benefits account which will be paid out once you have found employment in your new home.
If you move to a non-EU, EFTA or treaty nation, or can prove that you do not pay social security contributions to your new EU/EFTA nation of residence, in most cases you will be able to cash out all of your BVG contributions.
For more information, please visit the Substitute Occupational Benefit Institution website.