Your Swiss pension fund (2nd pillar / BVG), explained for expats
Your occupational pension is capital you build with your employer - and voluntary buy-ins can cut your tax bill sharply. But when you change jobs or leave Switzerland, what happens to it is one of your biggest financial decisions.
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What the 2nd pillar is
The second pillar is your mandatory occupational pension (BVG/LPP) - retirement capital funded by both you and your employer, on top of the state AHV pension.
Contributions are deducted from your salary each month, and your employer pays at least as much on top. The percentage rises with age, so older employees see larger contributions than younger ones.
Every year your fund sends you a pension certificate (Vorsorgeausweis) showing your accrued capital, your projected retirement pension, your death and disability cover, and - crucially - your maximum voluntary buy-in potential.
The 2nd pillar is mandatory above a salary threshold, and a "coordination deduction" means only part of your salary is actually insured under the mandatory portion. Everything above that, up to your fund's ceiling, is the extra-mandatory (überobligatorisch) part - which matters a lot for expats who may leave Switzerland later. Beyond retirement, the pillar also provides disability and survivors' benefits for you and your family.
Voluntary buy-ins (Einkauf)
You can pay extra into your pension fund to fill contribution gaps, and the whole amount is deductible from your taxable income.
Your pension certificate tells you the exact maximum buy-in potential you have built up - typically from years where you earned less, took a career break, or arrived in Switzerland part-way through your career.
The tax deduction lands in the year you pay. That makes buy-ins especially powerful in high-income or bonus years, where a large deduction can shave a meaningful chunk off your marginal tax band.
Two rules to keep in mind. First, a three-year lock-up applies before any lump-sum withdrawal after a buy-in - for home purchase, leaving Switzerland, or retirement. Second, spreading buy-ins across several years usually increases the total tax effect, because each year you shave off the top of your income at your highest marginal rate.
Before writing the cheque, always check your fund's financial health (its coverage ratio) and its conversion rate - both affect how much pension your capital actually buys you at retirement.
Job changes and leaving Switzerland
Your second-pillar capital follows you - to a new employer's fund, or to a vested-benefits account if you leave work or the country.
Change jobs and your accrued capital transfers to your new employer's pension fund. It never disappears, and you never lose the employer contributions already made.
Take a career break or leave the workforce, and it moves to a vested-benefits account (Freizügigkeit) until you're working again. Many expats split their capital across two vested-benefits foundations at this point to reduce future withdrawal tax.
Leave Switzerland permanently and the rules split in two. If you move to the EU/EFTA, the mandatory (BVG) portion usually has to stay in a vested-benefits account until close to retirement age. The extra-mandatory portion can often be paid out as a lump sum. If you move outside the EU/EFTA, the whole balance can normally be withdrawn.
Withdrawals are taxed once, at a reduced lump-sum rate that depends on where the vested-benefits foundation is domiciled - which is why getting advice before you move can make a real financial difference.
Should you make a buy-in?
Buy-ins are often smart for higher earners with spare cash and a healthy fund - but they're not automatic.
The pros are clear: a large tax deduction in the year you pay, and a bigger pension at retirement. For an expat in a high-tax canton with a bonus year, a buy-in can be one of the most efficient single-payment tax moves available.
The cons matter too. Your money is locked and, once inside the fund, its future value depends on your fund's coverage ratio, investment returns and its conversion rate - which has been trending down across Switzerland for years. There's also an opportunity cost: money you buy in with is money you don't invest yourself in ETFs or your pillar 3a.
Two hard rules. Never buy in within three years of a planned lump-sum withdrawal - you'll lose the tax deduction retroactively. And always coordinate the decision with your pillar 3a and any planned home purchase, so the different tax breaks stack rather than cancel each other.
How much could a buy-in save you?
Move the sliders to see the tax you could save this year with a voluntary pension buy-in.
- Remember: a three-year lock-up applies before any lump-sum withdrawal.
- A buy-in also increases your future pension.
A CHF 20'000 buy-in could save roughly CHF 6'000 in tax this year.
Indicative only, as of 2025 - actual saving depends on your canton and income; confirm your buy-in potential on your pension certificate.
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OpenPension fund (2nd pillar) - your questions, answered
What is the Swiss second pillar (BVG/LPP)?
It's your mandatory occupational pension - retirement capital built up with your employer on top of the state AHV pension, along with disability and survivors' cover. You and your employer both contribute from your salary.
What is a pension fund buy-in?
A voluntary extra payment into your pension fund to fill contribution gaps. The amount is fully deductible from your taxable income in the year you pay it, which is why buy-ins are a popular tax move.
Are pension buy-ins worth it?
Often, for higher earners with spare cash and a financially sound fund - the tax deduction is significant. But mind the three-year lock-up before a lump-sum withdrawal, and weigh it against investing the money yourself.
What happens to my pension if I change jobs?
It transfers to your new employer's pension fund. If there's a gap between jobs or you leave the workforce, it moves to a vested-benefits account until you're working again.
What happens to my 2nd pillar if I leave Switzerland?
If you move to the EU/EFTA, the mandatory portion generally must stay in a vested-benefits account until close to retirement, while the extra-mandatory portion can often be paid out. The rules are nuanced, so get advice before leaving.
Should I do a buy-in or max my pillar 3a first?
Many people fill pillar 3a first because it's more flexible, then consider buy-ins in high-income years. The best order depends on your income, timeline and your fund's health.
Make the most of your pension - and its tax breaks
Get an independent, expat-friendly view of your 2nd pillar, possible buy-ins, and what happens if you change job or leave Switzerland - free, in English, no obligation.