--- title: "Swiss 2nd pillar (OP): occupational pensions in 2026" url: https://www.ibani.com/en/guides/op-the-swiss-pension-fund-system lang: en date_modified: 2026-11-06 author: "Brice DELHOME" --- ![Swiss Pension System: 2nd Pillar (OP)](https://www.ibani.com/images/retirement-three-pillar-system.svg) # Swiss 2nd pillar (OP): occupational pensions in 2026 Reading time: 12 minutes |**Updated on 06.11.2026** By [Brice DELHOME](https://www.ibani.com/en/author/brice-delhome), Pension & Cross-Border Finance Specialist 📌 In short: the 2nd pillar (occupational pension) in 2026 - **2nd pillar membership:** it is compulsory once your annual salary with a single employer exceeds CHF 22,680; contributions are based on the coordinated salary, after a coordination deduction of CHF 26,460. These amounts are unchanged from 2025. - **Interest and pension:** mandatory retirement assets earn at least 1.25% in 2026 and 2% from 2027, then are converted into a pension at the minimum rate of 6.8%; the reform that would have cut it to 6.0% was rejected by voters on 22 September 2024. - **Leaving Switzerland:** a cross-border worker who stops working in Switzerland and remains compulsorily insured in an EU or EFTA country can only cash in the extra-mandatory portion; the mandatory portion stays in a vested benefits account and can be paid out at the earliest five years before the reference age. - **Lump-sum withdrawal for a resident of France:** Swiss withholding tax, then taxation in France, where the capital can, under conditions, qualify for the 7.5% final withholding after a 10% allowance (an effective 6.75%) if paid in a single instalment; the Swiss tax is then refunded on request. The Swiss pension system is built on [three essential pillars](https://www.ibani.com/en/guides/the-swiss-three-pillars-system), 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](https://www.ibani.com/en/guides/oasi-old-age-and-survivor-insurance)) 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. ## Table of Contents 1. What are the key occupational pension figures for 2026? 2. What is the 2nd pillar (OP)? 3. How are 2nd pillar contributions calculated? 4. How is the 2nd pillar calculated at retirement? 5. Pension or lump sum: how to decide? 6. When and how can you withdraw your 2nd pillar? 7. What are the withdrawal scenarios? 8. How is a lump sum withdrawal taxed? 9. What is changing, and what is not, for the 2nd pillar in 2026? 10. How can you optimise your 2nd pillar (buy-ins, staggering, currency)? 11. What does the 2nd pillar pay in case of death or disability? 12. Conclusion 13. Questions and answers on the Swiss 2nd pillar ## I. What are the key occupational pension figures for 2026? The key occupational pension figures for 2026 are 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%. Occupational pension threshold amounts, including the entry threshold and the coordination deduction, are indexed to the maximum OASI pension. As that pension was not adjusted on 1 January 2026, **every LOB threshold is identical to 2025**. These amounts will be raised on 1 January 2027, following the 1.59% increase in OASI/DI pensions decided by the Federal Council on 2 October 2026: the entry threshold will rise to CHF 23,040 and the coordination deduction to CHF 26,880 ([Federal Council press release](https://www.admin.ch/fr/newnsb/BqB41FVYi5FB), in French). Key figures for mandatory occupational pension (LOB) in 2026: threshold amounts, minimum rates and maximum OASI pension used as reference | 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; 2% from 1 January 2027 | | 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.* ## II. What is the 2nd pillar (OP)? The 2nd pillar, or occupational pension (OP), is the old-age, disability and death insurance that employees and their employers fund together. It tops up the [1st pillar](https://www.ibani.com/en/guides/oasi-old-age-and-survivor-insurance) 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: - From 1 January after turning **17**: cover for **death and disability** only. - From 1 January after turning **24**: **retirement savings** contributions begin. **Cross-border workers and expatriates:** occupational pension law applies on a **territorial** basis. A G permit holder living in Haute-Savoie, Ain or Doubs, or a B permit holder settled around Lake Geneva, is covered exactly like a Swiss resident. Passport and place of residence make no difference. The only exceptions concern **posted workers** covered by an A1 certificate from their home country, a case detailed in our guide on [occupational pensions and foreign workers: the employer's obligations](https://www.ibani.com/en/guides/lpp-employers-foreign-workers). ## III. How are 2nd pillar contributions calculated? In the 2nd pillar, retirement savings are calculated on the **coordinated salary**, that is, gross salary minus CHF 26,460 (with a floor of CHF 3,780 and a ceiling of CHF 64,260), at a statutory minimum rate of 7% to 18% depending on age; the employer pays at least half of the contributions. Contributions fund three distinct benefits: - **Retirement pension**: for old age. - **Disability pension**: in case of lasting incapacity to earn, through illness or accident. - **Survivors' pension**: for the spouse, registered partner or children on death. ### The coordinated salary: the real calculation base 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**. **2026 example:** on a gross annual salary of CHF 85,000, the fund subtracts CHF 26,460. The insured coordinated salary is therefore **CHF 58,540**. Mandatory retirement credits are calculated on that amount alone. 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. ### Retirement credits and the employer's share The law sets age-based retirement credit rates, applied to the coordinated salary: Minimum LOB retirement credit rates by age and corresponding annual credit for a coordinated salary of CHF 58,540 | 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](https://www.fedlex.admin.ch/eli/cc/1983/797_797_797/fr) requires the employer to bear **at least 50%** of total contributions. The amount deducted from your [payslip](https://www.ibani.com/en/guides/swiss-paycheck) 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. ### How your capital earns interest 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 ([Federal Council press release](https://www.admin.ch/fr/newnsb/8QdyDi9kz0trzgbwDud08), in French). For 2027, it is **raised to 2%** ([press release of 4 November 2026](https://www.bsv.admin.ch/fr/newnsb/8DF8zxcfvu7l), in French). On the extra-mandatory portion the fund is free to apply a different rate, sometimes higher, sometimes lower. ## IV. How is the 2nd pillar calculated at retirement? At retirement, the 2nd pillar pension depends on the **conversion rate** applied to the accumulated capital: at least 6.8% on the mandatory portion, a rate set by the fund on the extra-mandatory portion. The formula is simple: *annual pension = accumulated capital × conversion rate*. ### 6.8% only applies to part of your capital 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. **Worked example:** on capital of CHF 400,000, a rate of 6.8% produces a pension of **CHF 27,200 a year** (CHF 2,267 a month). The same capital converted at 5.3% produces **CHF 21,200 a year** (CHF 1,767 a month), which is **CHF 6,000 less every year**. Hence the importance of reading the rate your fund actually applies on your certificate, not just the statutory rate. ### Reference age keeps moving until 2028 The OASI 21 reform, in force since 1 January 2024, gradually aligns women's reference age with the 65 that applies to men: Reference age for women by year of birth, with the year of application (OASI 21 reform) | 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](https://www.ibani.com/en/guides/swiss-lpp-2nd-pillar-simulator-withdrawal) calculates capital and pension from your savings effort. ## V. Pension or lump sum: how to decide? Choosing between the 2nd pillar pension and the lump sum means weighing a guaranteed income for life, taxed every year, against capital taxed only once, but which you have to manage yourself. 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. Lifelong pension or lump sum from the 2nd pillar: security, taxation, estate, flexibility and currency exposure | 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. ## VI. When and how can you withdraw your 2nd pillar? You can withdraw your 2nd pillar at retirement, or earlier in four cases provided for by law: buying a main residence, leaving Switzerland permanently (in principle, only the extra-mandatory portion if you settle in the EU or EFTA), becoming self-employed in Switzerland, or a very small balance. The list is exhaustive: - Reaching reference age, or early retirement from 58 where the fund rules allow. - Buying or amortising your **main residence** (home ownership promotion scheme). - **Leaving Switzerland permanently**, subject to the conditions set out below ([Vested Benefits Act, arts 5 and 25f](https://www.fedlex.admin.ch/eli/cc/1994/2386_2386_2386/fr)). - Becoming **self-employed in Switzerland**, without compulsory occupational pension cover. - A very small balance, below the employee's own annual contribution. Changing employer therefore never triggers a cash payout: the **vested benefits** follow you to the new fund, or sit on a vested benefits account in the meantime. Cross-border workers who transfer those funds with ibani replace their bank's exchange rate margin with a margin of 0.40% to 0.15% depending on the amount, disclosed before the conversion. Run the numbers below. [Download ibani](https://www.ibani.com/en/app) ## VII. What are the withdrawal scenarios? Three early withdrawal scenarios for the 2nd pillar account for most requests: buying a home (home ownership promotion scheme), becoming self-employed in Switzerland and leaving Switzerland permanently. Each has its own conditions as to amount, deadline and destination. ### Withdrawal to buy a home 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: - The **minimum withdrawal** is CHF 20,000, and it is only possible **once every five years**. - After **50**, the amount is capped at the higher of: the vested benefits accrued at age 50, or half of the current vested benefits. - The property may be located **abroad**, including in France, as long as it is the home you actually live in. Our dedicated guide sets out the procedure: [withdrawing your 2nd pillar to buy property abroad](https://www.ibani.com/en/guides/withdraw-2nd-pillar-property-abroad). 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. ### Withdrawal to become self-employed 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. ### Withdrawal on leaving Switzerland permanently This is the situation that affects the most cross-border workers and expatriates. What happens to your assets depends entirely on where you go: Cash payout of LOB assets when leaving Switzerland permanently, by destination and compulsory social insurance coverage: mandatory portion and extra-mandatory portion | 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. **The reflex to have before you leave:** request the affiliation check from the **LOB Guarantee Fund** (the competent liaison body), choose your own vested benefits institution and give its details to your pension fund. Without instructions from you, the assets are paid to the LOB Substitute Occupational Benefit Institution no earlier than six months and no later than two years after you leave (Vested Benefits Act, art. 4(2)), where they often earn less. ## VIII. How is a lump sum withdrawal taxed? A 2nd pillar lump sum withdrawal is never added to your ordinary income: it is taxed **separately, in the year of payment, at a reduced rate**. For a cross-border worker living in France, the process has three steps: withholding tax in Switzerland, taxation in France, then refund of the Swiss tax. 1. **Swiss withholding tax.** The pension fund or vested benefits foundation deducts the tax before payment. The rate depends on the **canton where the pension institution is domiciled**, not on your former canton of employment: depending on the case it runs from roughly 4% to nearly 10% on a large lump sum. Our guide to [tax on 2nd pillar capital withdrawals](https://www.ibani.com/en/guides/pension-capital-withdrawal-tax-by-canton) compares the amounts canton by canton. The gaps between cantons are substantial on six-figure amounts. 2. **Taxation in your country of residence.** Under the France-Switzerland double taxation treaty, the capital is taxable in France. It can qualify there for the **7.5% final withholding** after a 10% allowance (art. 163 bis II of the French tax code), an effective **6.75%**, provided in particular that the payout is made **in a single instalment** and that the contributions were deductible. Splitting the payout deliberately forfeits that regime. 3. **Refund of the Swiss tax.** On production of a certificate of tax residence and proof of taxation in France, the Swiss withholding tax is **refunded in full**. The claim goes to the tax administration of the canton concerned, in principle within three years. Once that deadline has passed, the tax withheld stays with the canton: according to the scales published in Geneva, Zurich or Zug, that means roughly CHF 28,000 to CHF 32,000 on capital of CHF 400,000. ### The cost nobody quantifies: currency conversion 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, plus a margin of 0.40% to 0.15% depending on the amount (0.15% from CHF 250,000 to 1 million), announced in advance and displayed before you confirm. For the same capital of CHF 400,000, this margin comes to about CHF 600. You follow the EUR/CHF rate live on our [CHF/EUR rate](https://www.ibani.com/en/currency-converter/chf-to-eur-rate) page and trigger the transaction whenever it suits you. ## IX. What is changing, and what is not, for the 2nd pillar in 2026? In 2026, the statutory parameters of the 2nd pillar have not moved: the occupational pension reform was rejected, the minimum interest rate stays at 1.25% (it will rise to 2% in 2027) and the tax increase on lump sum withdrawals was dropped. What is new comes from the 1st pillar, with the 13th OASI pension. ### The occupational pension reform was rejected: the conversion rate stays at 6.8% 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%, replaced the fixed coordination deduction with a deduction equal to 20% of salary 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. ### The minimum interest rate stays at 1.25%, then rises to 2% in 2027 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. On 4 November 2026, the Federal Council decided to raise it to **2% on 1 January 2027**, above the 1.75% recommended at the end of August by the Federal Occupational Pension Commission, but in line with that same commission's formula applied to end-September data. It cites the rise in the yield on ten-year federal bonds (0.33% at the end of 2025, 0.59% at the end of September 2026), an average funding ratio estimated at 122.5% at the end of August 2026 for pension funds without a state guarantee, and the need to offset the inflation seen since 2022. This minimum applies only to the mandatory portion of the assets. ### The planned tax increase on lump sum withdrawals was dropped 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**: the Council of States struck it out on 17 December 2025, and the National Council confirmed its removal during the 2026 spring session. Parliament ultimately adopted a relief programme smaller than the Federal Council's, with savings of around CHF 1.4 billion in 2027. The current, more favourable scale for lump sum benefits therefore still applies, though the topic may well return in a future tax bill. ### 13th OASI pension: first payment in December 2026 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 exceeds CHF 4 billion from 2026, according to the Federal Social Insurance Office. To fund it, Parliament adopted an increase in **VAT** on 19 June 2026: the standard rate would rise from 8.1% to 8.5%, and the special rate for accommodation from 3.8% to 4.0%, with the reduced rate remaining at 2.6%. The increase amends the Federal Constitution and will be put to the people and the cantons on **29 November 2026**; if approved, it could take effect at the beginning of 2028 at the earliest. 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](https://www.ibani.com/en/guides/maximum-avs-pension). ## X. How can you optimise your 2nd pillar (buy-ins, staggering, currency)? Three levers help you optimise your 2nd pillar: voluntary buy-ins, in principle deductible from taxable income; staggering lump sum withdrawals, which softens progressive Swiss tax but can cost you the French final withholding; and reducing the cost of converting francs into euros. ### Voluntary buy-ins 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. **The three-year rule:** article 79b para. 3 LOB prohibits any lump sum withdrawal in the **three years** following a buy-in. Buying in and then withdrawing too soon exposes you to a reversal of the tax deduction. Cross-border workers taxed at source should also check that they can actually claim the deduction, usually through a subsequent ordinary assessment or the [quasi-resident status](https://www.ibani.com/en/guides/quasi-resident-status-switzerland-taxes). ### Staggering withdrawals 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. ### Currency conversion, the cost you can control 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: on the CHF 400,000 of capital used as an example above, a 1.5% margin costs CHF 6,000, compared with around CHF 600 at 0.15%, a difference of CHF 5,400. Our guides on [transferring income out of Switzerland](https://www.ibani.com/en/guides/transfer-swiss-salary-abroad) and [cross-border tax deductions](https://www.ibani.com/en/guides/cross-border-worker-tax-deductions) round out the picture. ## XI. What does the 2nd pillar pay in case of death or disability? In case of death, the 2nd pillar pays a pension to the surviving spouse and to orphans; in case of disability, a pension calculated as if you had contributed until reference age. This cover starts from 1 January after your 17th birthday, long before savings contributions start. The beneficiaries of a survivors' pension are: - The **surviving spouse** or registered partner, subject to the fund's conditions (length of marriage, age, dependent children). The statutory pension is 60% of the disability or retirement pension. - **Children** up to 18, or 25 if in education or an apprenticeship. The orphan's pension is 20% of the reference pension. - An **unmarried partner**, only where the fund rules provide for it and where you filed a declaration during your lifetime. This point is regularly overlooked and leaves unmarried partners with nothing every year. The disability pension is calculated on the retirement assets projected to reference age. It is paid after the applicable waiting period, on top of the 1st pillar disability pension. ## XII. Conclusion 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 replaces the bank's margin with a margin of 0.40% to 0.15% depending on the amount, on amounts counted in hundreds of thousands of francs. ## Questions and answers on the Swiss 2nd pillar ### What is the OP entry threshold in 2026? 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. * * * ### What is the OP conversion rate in 2026? 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%. * * * ### How do I find out how much I have saved in my 2nd pillar? 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. * * * ### Can I cash in my 2nd pillar when I change jobs? 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. * * * ### Can a cross-border worker who leaves Switzerland for good cash in their 2nd pillar? 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. * * * ### How is a 2nd pillar lump sum taxed for a resident of France? 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. * * * ### What happens to the 2nd pillar if I lose my job? 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 is paid to the LOB Substitute Occupational Benefit Institution no earlier than six months and no later than two years after you leave (Vested Benefits Act, art. 4(2)). Death and disability cover continues for one month after the employment relationship ends. * * * ### Can I use my 2nd pillar to buy a home after the age of 50? 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. ## Official sources - [Swiss Federal Act on Occupational Old-Age, Survivors' and Invalidity Pensions (BVG/LPP), arts 2, 8, 14, 66 and 79b](https://www.fedlex.admin.ch/eli/cc/1983/797_797_797/fr) — Fedlex (official French text), accessed 29 September 2026 - [Ordinance on Occupational Old-Age, Survivors' and Invalidity Pensions (BVV 2/OPP 2), arts 5 and 12](https://www.fedlex.admin.ch/eli/cc/1984/543_543_543/fr) — Fedlex (official French text), accessed 29 September 2026 - [Federal Act on Vested Benefits in Occupational Pensions (FZG/LFLP), arts 4, 5 and 25f](https://www.fedlex.admin.ch/eli/cc/1994/2386_2386_2386/fr) — Fedlex (official French text), accessed 29 September 2026 - [Occupational pensions: the minimum interest rate remains at 1.25%](https://www.admin.ch/fr/newnsb/8QdyDi9kz0trzgbwDud08) — Federal Council, press release (in French), accessed 29 September 2026 - [Occupational pensions: the Federal Council raises the minimum interest rate to 2%](https://www.bsv.admin.ch/fr/newnsb/8DF8zxcfvu7l) — Federal Council (FSIO), press release of 4 November 2026 (in French), accessed 6 November 2026 - [Minimum OASI/DI pension to rise by 20 francs](https://www.admin.ch/fr/newnsb/BqB41FVYi5FB) — Federal Council, press release of 2 October 2026 (in French), accessed 6 November 2026 - [Occupational pension reform (LOB reform)](https://www.bsv.admin.ch/fr/reforme-lpp-2024) — Federal Social Insurance Office (FSIO), page in French, accessed 30 September 2026 - [13th OASI pension: popular vote on additional OASI funding through a VAT increase](https://www.bsv.admin.ch/fr/votation-13e-rente-avs) — Federal Social Insurance Office (FSIO), page in French, accessed 30 September 2026 - [2027 budget relief programme](https://www.efd.admin.ch/fr/programme-allegement-budget-2027) — Federal Department of Finance (FDF), page in French, accessed 30 September 2026 **Methodology and sources.** 2026 threshold amounts and minimum interest rate: Federal Social Insurance Office (FSIO) and Federal Council decision of 5 November 2025; 2027 minimum rate: Federal Council decision of 4 November 2026; 2027 threshold amounts: Federal Council decision of 2 October 2026. Legal framework: LOB (arts 2, 8, 14, 66 and 79b), OPP 2 (arts 5 and 12) and Vested Benefits Act (arts 4, 5 and 25f). Result of the vote of 22 September 2024 on the occupational pension reform: Federal Chancellery; content of the reform: FSIO. Treatment of lump sum benefits in the 2027 budget relief programme: Federal Council dispatch (proposed scale), Federal Department of Finance (savings adopted) and press release of the Swiss Insurance Association of 4 March 2026 (decisions of the Council of States of 17 December 2025 and of the National Council at the 2026 spring session). 13th OASI pension and VAT funding: FSIO (implementation and vote of 29 November 2026) and federal decree of 19 June 2026. 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 (specific corrections and update of section IX on 30 September 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. ## Get our next guide by email Don't miss our next article on life and work in Switzerland, and receive it straight into your mailbox when published! [Subscribe](https://eepurl.com/gbPvhf) ## Have a question? Our FAQ gathers the most frequent questions that our clients ask us. Your question is probably answered there! 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