Pension fund & BVG explained simply: where your salary goes
For many, the BVG deduction is the most opaque item on the payslip: it depends on age, is not calculated on the full salary and varies by fund. Behind it sits a clear system — understand it, and you also understand when buy-ins pay off.
Published: 16.07.2026 · Updated: 16.07.2026
The three-pillar principle in one sentence
The AHV (1st pillar) secures existence, the pension fund (2nd pillar, BVG) secures your accustomed standard of living, and the third pillar fills the gap privately — how, see pillar 3a vs 3b. This guide explains the mechanics of the second pillar with the 2026 figures.
Who is insured?
Mandatorily BVG-insured are employees earning more than the entry threshold of CHF 22,680 per year. Risk cover (death, disability) runs from the start of employment; retirement saving begins at 25.
The coordinated salary: why not everything counts
The AHV already covers the lower part of the salary. The coordination deduction of CHF 26,460 is therefore subtracted from the gross salary; the remainder is insured — the coordinated salary, mandatorily between CHF 3,780 and CHF 64,260 (upper limit of countable salary: CHF 90,720).
An example: on a gross salary of CHF 80,000, the coordinated salary is 80,000 − 26,460 = CHF 53,540. The savings contributions are calculated on this amount.
Retirement credits: the deduction grows with age
The mandatory BVG staggers the savings contributions (retirement credits) by age:
| Age | Credit (of the coordinated salary) |
|---|---|
| 25–34 | 7% |
| 35–44 | 10% |
| 45–54 | 15% |
| 55–reference age | 18% |
The employer bears at least half — so your payslip shows at most half the rate; in the example above at age 40: 10% × 53,540 ÷ 2 = about CHF 223 per month. How the BVG deduction combines with AHV, ALV and NBU into your net salary is computed age-precisely by the salary calculator — including the 13th month salary, which is insured as an ordinary salary component (more on the 13th).
Important: that is the legal minimum. Many funds insure beyond it (lower coordination deduction, higher rates, salary above the cap) — your actual deduction can therefore be higher. What counts is the pension certificate your fund sends you each year.
Buy-ins: the quiet tax lever
If you have contribution gaps (student years, time abroad, salary jumps), you can buy into your pension fund. The buy-in is fully deductible from taxable income — under high progression it is often the most effective legal tax lever there is. The rules: maximum buy-in amount per your pension certificate, a 3-year blocking period for capital withdrawals after a buy-in, money tied up until retirement. Staggered across several high-income years, the deduction works repeatedly.
What to keep in mind
- Read your pension certificate — once a year: insured salary, retirement assets, buy-in potential, projected pension.
- Check part-time: the fixed coordination deduction hits part-time workloads disproportionately — some funds adjust it to the workload; asking pays.
- Time buy-ins before capital withdrawals (3-year rule) and combine them with pillar 3a: both deductions together cut taxable income substantially.
Frequently asked questions
Why is not my whole salary insured?
Because the first pillar (AHV) already covers part of it. The BVG therefore subtracts the coordination deduction of CHF 26,460 (2026) and mandatorily insures only the "coordinated salary" — at least CHF 3,780, at most CHF 64,260. Many funds voluntarily insure more (super-mandatory cover).
From when do I pay BVG contributions?
You are insured if you earn more than CHF 22,680 per year (2026) with one employer. Until 24, only the risks of death and disability are covered; retirement saving with the age credits starts at age 25.
Is a pension-fund buy-in worth it?
A buy-in closes contribution gaps, is fully deductible from taxable income and works hardest in high-income years. Note: after a buy-in, capital withdrawals from it are blocked for three years, and the money is tied up until retirement. Before a larger buy-in, ask your fund and, if needed, a specialist.