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Swiss Pension Reform (BVG) 2026: What Changes for Your Pension Fund — And What You Should Do Now

By Thierry Borgeat, CFA & Co-Founder · Last updated: March 2026 · 10 min read

The BVG reform (reform of occupational pensions) is the biggest overhaul of the Swiss pension fund system in over 20 years. It affects every employee in Switzerland — directly or indirectly. Yet very few people understand what's actually changing and what it means for their wallet.

In this article, we explain the reform without jargon: What's changing? Who benefits? Who loses out? And what should you do right now as an employee or self-employed person?

The reform at a glance

The BVG reform was put to a public vote on September 22, 2024 — and was rejected by 67.1%. This means the current BVG rules remain in place for now. However, the problems the reform aimed to solve haven't disappeared. It's likely that a revised proposal will come. Until then, the existing rules apply — and those are exactly what you need to understand to optimise your pension planning.

Here are the key parameters that the rejected proposal would have changed — and that will almost certainly be on the table again in a future reform:

Coordination deduction: Why part-time workers are disadvantaged

The coordination deduction is one of the least understood yet most consequential concepts in the Swiss pension system. Currently it works like this: a fixed amount of CHF 25,725 (as of 2026) is subtracted from your gross salary before the pension fund calculates your insured salary. If you earn CHF 80,000 gross, your insured salary is CHF 54,275 — only this amount determines your pension fund contributions and benefits.

The problem: the coordination deduction is fixed — regardless of your work percentage. Someone working 100% and earning CHF 80,000 has an insured salary of CHF 54,275. Someone working 50% and earning CHF 40,000 has an insured salary of only CHF 14,275 — even though the work effort is proportionally identical. This means: part-time workers are massively underinsured in the 2nd pillar.

The planned reform would have replaced the fixed deduction with a percentage-based deduction of 20% of salary. For someone earning CHF 40,000, that would be CHF 8,000 instead of CHF 25,725 — the insured salary would have risen from CHF 14,275 to CHF 32,000. For hundreds of thousands of part-time workers, this would have made an enormous difference in retirement benefits.

Until a reform takes effect: if you work part-time, you likely have a significant pension gap in the 2nd pillar. Check this with our Pension Gap Calculator.

Conversion rate: Why pensions are under pressure

The conversion rate determines how much annual pension you receive per CHF 100,000 of accumulated retirement capital. Currently, the BVG minimum conversion rate is 6.8% — meaning CHF 100,000 in capital yields CHF 6,800 in annual pension.

The problem: this rate was set when life expectancy was shorter and investment returns were higher. Today, retirees live longer (a 65-year-old lives on average another 21 years), and returns are lower. Pension funds must cross-subsidise the gap — at the expense of the younger generation, whose retirement capital earns less interest.

The planned reform would have lowered the BVG minimum conversion rate to 6.0%. Concretely: with CHF 400,000 in retirement capital, the annual pension would have dropped from CHF 27,200 to CHF 24,000 — a reduction of CHF 3,200 per year, or CHF 267 per month.

Entry threshold: Who isn't covered at all

Currently, your annual income must be at least CHF 22,050 (as of 2026) for you to be mandatorily insured in a pension fund. If you earn less — for example because you work a small percentage or have several small jobs — you fall completely through the safety net of the 2nd pillar.

This affects an estimated 70,000 to 100,000 people in Switzerland — disproportionately women, part-time workers, and people with multiple small employment contracts. They accumulate no pension fund savings and receive no pension from the 2nd pillar in old age.

The planned reform would have significantly lowered this threshold, giving more people access to occupational pensions. Until that happens, Pillar 3a is especially important for people below the entry threshold — it's the only tax-advantaged retirement savings path alongside the AHV.

Savings contributions: The current model and what was planned

Today, BVG savings contributions increase with age — a structure that disadvantages older workers in the job market because they're more expensive for employers:

The reform would have increased contributions for younger workers and decreased them for older ones — an important step to reduce age discrimination in the job market. At the same time, younger workers would have started building wealth earlier, which is highly advantageous long-term thanks to compounding.

Transition generation: Who was to be compensated?

The biggest controversy of the reform concerned the transition generation — the cohorts who would receive lower pensions due to the reduced conversion rate but no longer have enough time to compensate through higher savings contributions. The reform envisaged a pension supplement for 15 cohorts, financed through a solidarity contribution from all insured persons.

This mechanism was one of the main reasons for the rejection — it was criticised as too complex, too expensive, and as redistribution from young to old. A future reform will need to solve this problem differently.

Winners and losers in the current system

Disadvantaged in the current system: Part-time workers (the high fixed coordination deduction eats into their insured salary), young workers (low savings contributions during the most important compounding years), people earning below CHF 22,050 (not insured at all), and everyone who depends on the BVG minimum conversion rate (it's mathematically too high and is cross-subsidised).

Favoured in the current system: People close to retirement (they benefit from the high conversion rate at the expense of younger generations), high earners with super-mandatory benefits (the fixed coordination deduction affects them less), and employers of older workers (they currently pay high contributions that the reform would have reduced).

What you should do now

1. Understand your pension fund statement

Your PK statement is the most important document for your retirement — and most people in Switzerland throw it in a drawer unread. Read our guide: Your pension fund statement explained. Pay special attention to the conversion rate (mandatory vs. super-mandatory), the projected retirement pension, and the available purchase amount.

2. Calculate your pension gap

Many people only realise at 55 that their pension fund isn't enough. Use our Pension Gap Calculator to see where you stand — and what you can do while you still have time.

3. Maximise your Pillar 3a

Regardless of what happens with the BVG reform: Pillar 3a remains the most effective way to save for retirement with tax benefits. Pay the maximum every year (2026: CHF 7,258). And invest the money — don't leave it in a savings account. The difference over 30 years is enormous. Use our 3a Tax Savings Calculator for your personal calculation.

4. Check pension fund purchases

If your PK statement shows an available purchase amount, that's a powerful tax optimisation tool. Voluntary purchases are fully tax-deductible and increase your retirement benefits. But: first check whether your pension fund is financially healthy (funding ratio above 100%). A purchase into an underfunded fund can be risky.

5. Don't wait for politics

The BVG reform was rejected, and it will take years before a new proposal is drafted and implemented. Don't wait. Act now: maximise your 3a, check purchases, and invest your savings. The best retirement planning is the kind you take into your own hands.

Your pension fund is important — but it's only one third of your retirement income. The other two thirds are up to you.

Frequently asked questions

More calculators and articles: Pension fund statement explained → · Pension Gap Calculator → · 5 years without a pension fund → · Pension vs Lump Sum Calculator → · 3a Tax Savings Calculator →

This article was written by Thierry Borgeat, CFA, and reviewed by Patrick Rissi, CFA. Last updated March 2026.

Disclaimer: This article is for general information purposes and does not constitute personal pension or tax advice. arvy is a FINMA-supervised asset manager. Imprint & Legal Information