Pension
Occupational Pension (BVG/LPP)
Simple Definition
The mandatory occupational pension fund, funded by both employer and employee contributions. It claims to replace ~60% of your final salary when combined with AHV.
Why this matters to Expats.
This money belongs to YOU. It is not a tax. When you leave Switzerland efficiently (non-EU), you can cash this out. For high earners (>CHF 130k), look for "1e Plans" which allow you to choose your own investment strategy for the extra-mandatory part.
Actionable Intelligence
Buy-Ins (Einkauf): You can pay extra money into your 2nd Pillar to fill "contribution gaps" (common for expats who arrived late). These buy-ins are 100% tax-deductible! It is a massive tax hack.
Vesting: If you leave your job, you must move this money to a "Vested Benefits Account" (Freizügigkeitskonto). Do not leave it in the default state foundation (BVG Stiftung Auffangeinrichtung) as the interest is terrible.
Frequently Asked Questions
Can I use it for a house?
Yes, you can pledge or withdraw this money to buy a primary residence (Wohneigentumsförderung).
What if I divorce?
Pension assets accumulated during marriage are split 50/50, regardless of who worked.
Is it safe?
Yes, even if your employer goes bankrupt, the Security Fund BVG guarantees your mandatory savings.
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