BVG/LPP (Swiss occupational pension)
is Switzerland’s mandatory occupational pension (second pillar): employees earning above the entry threshold (CHF 22,680/year, 2026) are insured through their employer’s pension fund, with age-banded credits from 7% to 18% of the coordinated salary and the employer paying at least half.
How the second pillar works for employers
The employer affiliates with a pension fund, insures qualifying staff, and finances at least 50% of contributions; credits rise with age bands, making older hires costlier — a real factor in Swiss employment budgeting. The coordination deduction (CHF 26,460) defines the insured salary under the legal minimum; many plans insure more.
Plan quality is a differentiator in offers and in payrolling: two providers quoting the same margin can fund very different BVG plans. Vested benefits move with the employee between funds on job changes.
FAQ
Who pays BVG contributions?
Employer and employee share them, with the employer bound to at least half; the exact split and the plan’s generosity above legal minimums are set in the pension fund rules. On payslips the employee sees their share; the employer’s share sits in employment cost.
What happens to BVG when leaving Switzerland?
Vested benefits transfer to a vested-benefits account; cash withdrawal is possible when leaving for outside the EU/EFTA, while the mandatory part generally stays blocked for EU/EFTA leavers until retirement ages. Cross-border moves deserve advice — the rules interact with the destination’s system.