Swiss 2nd pillar (OP): occupational pensions in 2026
Reading time: 12 minutes |Updated on 10.08.2026
By Brice DELHOME, Pension & Cross-Border Finance Specialist
Reading time: 12 minutes |Updated on 10.08.2026
By Brice DELHOME, Pension & Cross-Border Finance Specialist
The Swiss pension system is built on three essential pillars, one of which is the 2nd pillar, governed by the Federal Act on Occupational Old Age, Survivors' and Invalidity Pension Provision (LOB, also known as OPA or BVG). It complements the 1st pillar (OASI) so that you can maintain your standard of living in retirement, while also covering disability and death. For an employee in Switzerland it is usually the largest single component of their financial wealth at retirement.
This guide covers the threshold amounts in force since 1 January 2026, the political decisions of recent months, and the specific position of cross-border workers and expatriates who leave Switzerland.
Occupational pension threshold amounts are indexed to the maximum OASI pension. As that pension was not adjusted on 1 January 2026, every LOB threshold is identical to 2025. The next ordinary adjustment is expected on 1 January 2027.
| Parameter | 2026 amount | What it is for |
|---|---|---|
| Entry threshold | CHF 22,680 | Minimum annual salary for compulsory insurance |
| Coordination deduction | CHF 26,460 | Share of salary already covered by OASI, removed from the calculation base |
| Minimum coordinated salary | CHF 3,780 | Floor when the salary barely exceeds the entry threshold |
| Maximum insured annual salary | CHF 90,720 | Ceiling of the mandatory scheme; above it you enter the extra-mandatory range |
| Maximum coordinated salary | CHF 64,260 | Highest possible calculation base for mandatory contributions |
| Minimum LOB interest rate | 1.25% | Minimum return on mandatory retirement assets |
| Minimum conversion rate | 6.8% | Converts mandatory capital into an annual pension |
| Maximum OASI pension (reference) | CHF 2,520 / month | The index behind every threshold above |
Sources: Federal Social Insurance Office (FSIO), Ordinance on Occupational Benefit Plans (BVV 2), Federal Council decision on the 2026 minimum interest rate.
The 2nd pillar tops up the 1st pillar with one constitutional objective: together with OASI, to replace roughly 60% of your final salary. Whereas OASI is a pay-as-you-go scheme, occupational pensions are fully funded on an individual basis: every franc paid in by you and your employer credits your own retirement account.
Membership is compulsory as soon as an employee earns more than CHF 22,680 a year (2026) with a single employer. Two age thresholds interact with that income threshold:
Contributions fund three distinct benefits:
The contribution percentage never applies to your full gross salary. The fund first subtracts the coordination deduction of CHF 26,460, deemed already insured by OASI. What remains is the coordinated salary.
Two safeguards frame the calculation: if the resulting coordinated salary is below CHF 3,780 it is rounded up to that floor; and it is capped at CHF 64,260, because the mandatory scheme only insures salary up to CHF 90,720.
The law sets age-based retirement credit rates, applied to the coordinated salary:
| Age | Credit rate (statutory minimum) | On a coordinated salary of CHF 58,540 |
|---|---|---|
| 25 to 34 | 7% | CHF 4,098 / year |
| 35 to 44 | 10% | CHF 5,854 / year |
| 45 to 54 | 15% | CHF 8,781 / year |
| 55 to reference age | 18% | CHF 10,537 / year |
The employer's duty: article 66 LOB requires the employer to bear at least 50% of total contributions. The amount deducted from your payslip is therefore always at least matched by your company. Many funds go further: a 60/40 split, or even 100% employer-funded savings, removal of the coordination deduction, or cover of the extra-mandatory range above CHF 90,720. Those three points are the first to check on your annual pension certificate.
Mandatory retirement assets must earn at least the minimum LOB interest rate, set each autumn by the Federal Council. For 2026 it was kept at 1.25%, as in 2024 and 2025. On the extra-mandatory portion the fund is free to apply a different rate, sometimes higher, sometimes lower.
At reference age, the accumulated capital is turned into an annual pension by the conversion rate. The formula is simple: annual pension = accumulated capital × conversion rate.
This is the most commonly misunderstood point. The statutory minimum of 6.8% only applies to the mandatory portion of your assets (the LOB shadow account). On the extra-mandatory portion the fund sets its own rate, often between 5.0% and 5.8%. Many so-called enveloping funds apply a single blended rate to the whole balance, provided the resulting pension is at least equal to what the statutory calculation on the mandatory portion alone would have produced.
The OASI 21 reform, in force since 1 January 2024, gradually aligns women's reference age with the 65 that applies to men:
| Women born in | Reference age | Year of application |
|---|---|---|
| 1960 and earlier | 64 | until 2024 |
| 1961 | 64 years and 3 months | 2025 |
| 1962 | 64 years and 6 months | 2026 |
| 1963 | 64 years and 9 months | 2027 |
| 1964 and later | 65 | from 2028 |
On the occupational pension side, early retirement is possible from age 58 if your fund's rules allow it. Every year of early retirement cuts the pension twice over: fewer years of contributions and interest, and a lower conversion rate. To project your own situation, our interactive occupational pension simulator calculates capital and pension from your savings effort.
At retirement the law guarantees your right to take at least 25% of your mandatory assets as a lump sum. Many funds allow considerably more, often the whole balance, subject to notice, frequently three years, which you should check in the fund rules.
| Criterion | Lifelong pension | Lump sum |
|---|---|---|
| Security | Guaranteed income for life, however long you live | Risk of running out if poorly managed |
| Taxation | Taxed every year as ordinary income | Taxed once, at a reduced separate rate |
| Estate | Spouse's pension usually capped at 60%, nothing beyond | Whatever is left forms part of the estate |
| Flexibility | Fixed amount, not indexed in most funds | Full freedom of use and investment |
| Currency exposure | CHF to EUR conversion repeated every month, for life | A single conversion, but on a very large amount |
The cross-border angle: whichever you choose, if you live in the euro area your 2nd pillar will have to be converted into euros. As a pension, that conversion happens 12 times a year for 20 to 30 years; as a lump sum, it happens once on a six-figure amount. Either way, the exchange rate margin applied is the most underestimated cost in the whole file.
Pension assets are locked in principle. They are released only in cases exhaustively listed by law:
Outside those cases, changing employer never triggers a cash payout: the vested benefits follow you to the new fund, or sit on a vested benefits account in the meantime.
For cross-border workers, transferring those funds with ibani avoids the exchange rate margin charged by traditional and online banks. Run the numbers below.
This is the most common reason for an early withdrawal. The 2nd pillar can fund the equity for the purchase of a main residence, or amortise an existing mortgage. Three rules matter:
Be aware that the withdrawal mechanically reduces your future pension and your death and disability cover. The fund also registers a restriction on the right to sell in the Swiss land register; for a property abroad, it will normally require equivalent security.
A full cash payout of the vested benefits is possible if you become self-employed in Switzerland and are no longer subject to compulsory occupational pension cover. You must produce the confirmation of self-employed status issued by the OASI compensation office, and file the request within one year of starting the activity. Becoming self-employed in France does not give that right.
This is the situation that affects the most cross-border workers and expatriates. What happens to your assets depends entirely on where you go:
| Destination | Mandatory portion | Extra-mandatory portion |
|---|---|---|
| Outside the EU / EFTA United Kingdom, Canada, UAE, Singapore… | Cash payout possible | Cash payout possible |
| EU / EFTA with compulsory social insurance France, Germany, Italy, Spain, Portugal… | Locked on a Swiss vested benefits account | Cash payout possible |
| EU / EFTA without compulsory cover rare cases: inactivity, special status | Payout possible on proof of non-affiliation | Cash payout possible |
In practice, a cross-border worker who goes back to work in France remains compulsorily affiliated to a state social security scheme. The mandatory portion is therefore transferred to a Swiss vested benefits account or policy, where it keeps earning interest. It can be released at the earliest five years before reference age, so from 60, and at the latest five years after, with any deferral beyond reference age requiring proof of continued gainful activity since 2024.
A lump sum is never added to your ordinary income: it is taxed separately, at a reduced rate. For a cross-border worker the process has three steps.
On CHF 400,000 transferred into euros, an exchange rate margin of 1.5%, the usual order of magnitude charged by a traditional bank on this kind of transaction, amounts to CHF 6,000. That is often more than the French tax due on the same capital at 6.75%, and far more than every administrative fee in the file put together.
What ibani changes: you enter the personal Swiss IBAN provided by ibani directly on your pension fund's form. On receipt, your capital is converted at the market rate, with fees announced in advance and displayed before you confirm. You follow the EUR/CHF rate live on our CHF/EUR rate page and trigger the transaction whenever it suits you.
On 22 September 2024 Swiss voters rejected the occupational pension reform by 67.1% of no votes. The bill would have cut the minimum conversion rate from 6.8% to 6.0%, halved the coordination deduction and lowered the entry threshold, with a compensatory pension supplement for fifteen cohorts. None of it came into force: the 2026 statutory parameters are the pre-reform ones. No new bill has been passed since.
On the recommendation of the Federal Occupational Pension Commission, the Federal Council kept the minimum interest rate at 1.25% as of 1 January 2026, citing modest returns on federal bonds and current economic and geopolitical uncertainty. That is the third consecutive year at this level.
Under the 2027 budget relief programme, the Federal Council proposed heavier federal taxation of lump sum benefits from the 2nd pillar and pillar 3a, through a new progressive scale in article 38 of the Federal Direct Tax Act (marginal rates rising to 11.5% on the largest withdrawals). After strong opposition in the consultation, Parliament removed the measure from the package in March 2026. The current, more favourable scale therefore still applies, though the topic may well return in a future tax bill.
The 13th OASI pension, approved in a popular vote in March 2024, will be paid for the first time in December 2026, as a supplement to the December pension equal to one twelfth of the year's old-age pensions. Its cost is estimated at around CHF 4.2 billion for 2026. Parliament opted for funding through VAT, with the standard rate due to rise from 8.1% to 8.5% on 1 December 2026; that increase is subject to a mandatory popular vote. It directly affects your 1st pillar, and therefore the overall income your occupational pension has to top up. See our guide to the maximum OASI pension.
If your pension certificate shows a buy-in potential (a gap caused by years in education, a late arrival in Switzerland or salary progression), you can pay that amount in voluntarily. It is deductible from taxable income in the year of payment, which makes it one of the most powerful tax levers available to an employee in Switzerland.
Because tax on lump sum benefits is progressive, withdrawing CHF 500,000 at once costs proportionally more than two withdrawals of CHF 250,000 spread over time. Cantons do, however, add together benefits received in the same year, and often those of the spouse. Conversely, for a French resident, deliberate splitting forfeits the 7.5% final withholding. The two tax logics pull in opposite directions: the trade-off needs an adviser who knows both systems.
This is the only one of the three levers entirely within your control, with no fund rules or tax authority involved. Whether you receive a monthly pension or a single lump sum, comparing the rate actually applied, rather than the rate advertised, on the CHF to EUR conversion changes the outcome by thousands of francs. Our guides on transferring income out of Switzerland and cross-border tax deductions round out the picture.
The 2nd pillar is not only a savings plan: it also covers disability and death, and does so from 1 January after your 17th birthday, long before savings contributions start. The beneficiaries are:
In case of disability, the pension is calculated on the retirement assets projected to reference age, as if you had kept contributing. It is paid after the applicable waiting period, on top of the 1st pillar disability pension.
The 2nd pillar is the centrepiece of retirement for an employee in Switzerland, and the rejection of the reform in September 2024 froze its parameters: an entry threshold of CHF 22,680, a coordination deduction of CHF 26,460, a minimum interest rate of 1.25% and a conversion rate of 6.8% remain the benchmark in 2026. Three practical reflexes apply to everyone: read your pension certificate every year to find the conversion rate your fund actually applies, choose your own vested benefits institution before leaving Switzerland rather than letting the money default to the substitute institution, and claim the refund of Swiss withholding tax once you have been taxed in your country of residence.
And on the final step, converting francs into euros, the provider is your choice. Transferring your pension or lump sum through ibani rather than by a standard bank transfer saves the exchange rate margin on amounts counted in hundreds of thousands of francs.
In 2026 you must earn more than CHF 22,680 a year from a single employer to be compulsorily insured under the Occupational Pensions Act. The coordination deduction is CHF 26,460 and the maximum insured annual salary is CHF 90,720. These amounts are unchanged from 2025.
The statutory minimum conversion rate remains 6.8% on the mandatory portion in 2026. The reform that would have lowered it to 6.0% was rejected in the popular vote of 22 September 2024 by 67.1% of voters. On the extra-mandatory portion, pension funds set their own rate, often between 5.0% and 5.8%.
Your pension fund sends you a pension certificate every year. It shows your total retirement assets, the split between the mandatory portion (the LOB shadow account) and the extra-mandatory portion, the insured coordinated salary, your voluntary buy-in potential and the projected pension at reference age.
No, it is never paid out in cash. Your vested benefits are transferred to your new employer's pension fund. If you do not start a new job in Switzerland straight away, the money is placed on a vested benefits account or policy until your next affiliation.
Only partly. If they move to an EU or EFTA country and are compulsorily insured there for old age, disability and survivors, only the extra-mandatory portion can be paid out in cash. The mandatory portion stays locked on a Swiss vested benefits account and can be released at the earliest five years before reference age. Moving to a country outside the EU and EFTA does allow a full cash payout.
The pension fund first deducts Swiss withholding tax, at a rate that depends on the canton where the pension institution is domiciled. Under the France-Switzerland double taxation treaty the capital is then taxable in France, where it can qualify for the 7.5% final withholding after a 10% allowance, an effective 6.75%, provided the payout is made in a single instalment. Once the French tax assessment is produced, the Swiss withholding tax is refunded in full.
The assets are transferred to a vested benefits account or policy of your choice. You must give your former pension fund the details of that institution; otherwise the money goes to the LOB Substitute Occupational Benefit Institution after two years. Death and disability cover continues for one month after the employment relationship ends.
Yes, but the amount is capped. After 50 you may only withdraw the higher of these two figures: your vested benefits as they stood on your 50th birthday, or half of your current vested benefits. The minimum withdrawal is CHF 20,000 and it is only possible once every five years.
Methodology and sources. 2026 threshold amounts and minimum interest rate: Federal Social Insurance Office (FSIO) and Federal Council decision of October 2025. Legal framework: LOB (art. 2, 7, 8, 16, 66, 79b), Vested Benefits Act (art. 5) and Vested Benefits Ordinance (art. 16). Result of the vote of 22 September 2024 on the occupational pension reform: Federal Chancellery. Treatment of lump sum benefits in the 2027 budget relief programme: parliamentary decisions of the 2026 spring session. 13th OASI pension and VAT funding: FSIO and final parliamentary votes. French taxation of Swiss pension capital: art. 163 bis II of the French tax code and the France-Switzerland double taxation treaty.
Disclaimer. This article is provided for information purposes and reflects the law as at 10 August 2026. Cross-border pension taxation is complex and depends on your canton, your country of residence and your pension fund's rules. Consult your pension institution and a tax adviser before any withdrawal.
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