Occupational pension (BVG) remains a central element of financial security in retirement in Switzerland. Yet it is facing serious challenges. Since voters rejected a reform of BVG in the fall of 2024, urgent adjustments have not been made. As a result, companies must prepare for changes on their own and actively steer their pension fund strategy.
The statutory minimum conversion rate remains at 6.8% for the time being, but many pension funds already apply lower rates in their extra-mandatory pension assets – sometimes below 5%. In the long term, this will lead to a pension gap that will need to be filled either by the insured persons themselves or additional solutions.
Life expectancy in Switzerland is rising continuously. In 1950, there was one retiree for every six gainfully employed persons. Yet today, this ratio is at only 1 to 3.5 and continuing to fall. This is putting a significant burden on the Swiss pension system, as pensions must be paid for longer periods of time.
Although Swiss BVG is based on a fully funded capital coverage principle (i.e., every person saves for himself/herself), studies show that more than CHF 6 billion have to redistributed annually from employed persons to retirees to finance retirement pensions. This is necessary as many pension funds employ too high a conversion rate and capital gains are insufficient to cover pensions in the long term.
Pension schemes are struggling to generate solid returns amid current market conditions. In recent years, the average interest of pension fund assets tended to be below 2%, yet a rate of 3-4% would be needed to ensure financing in the long run.
Given the rejection of BVG reform, the coordination deduction remains unchanged at currently CHF 26,460 a year (2025). This means that part-time employees (often women) continue to accumulate lower retirement savings and are therefore less protected in retirement.
Already today, employers make 60% of pension fund contributions, a number that is likely to continue to rise. Without reform, they will face higher costs, as many pension funds will be forced to restructure their financing.
Since voters rejected the latest attempt at BVG reform, the existing regulations continue to apply. Yet stagnation does not mean security. Companies now have two options: Wait and then respond – or be proactive and look for the best possible pension fund solution for them and their employees.
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With an independent comparison, you can reduce unnecessary expenses.
Companies that adjust their pension fund intelligently are better positioned in the long term.
Rejection of the reform does not mean that nothing has to change, on the very contrary! Now is the time for companies to act independently to prepare for future challenges in the best way possible.
smzh ag supports you in doing so by providing an independent, company-specific pension fund analysis. We will show you how to optimize your pension fund solution, reduce costs, and increase your attractiveness as an employer.
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