The 2nd pillar explained simply, without jargon.
Understand Swiss occupational pension in 5 minutes: what it is, where the money lives, when it moves, how you recover it.
Three pillars in Swiss retirement. The first (AVS, Swiss state pension) is universal. The second (LPP, Swiss occupational pension) is tied to your job. The third is voluntary. This article only covers the second — the one that gets lost most easily.
Where the money comes from
Every month you work in Switzerland, you and your employer contribute to a pension fund. The total contribution is around 14% of the coordinated salary, split roughly evenly. The coordinated salary is your AVS-relevant salary minus a coordination deduction (CHF 26,460 in 2025). The money is not paid to you: it is set aside until retirement, permanent departure from Switzerland, or a legal early-withdrawal case.
How much I contribute, and from when
| Parameter | 2025 amount | Definition |
|---|---|---|
| LPP entry threshold | CHF 22,680 | Minimum annual salary to be enrolled |
| Capped AVS salary | CHF 90,720 | Cap used for the calculation |
| Coordination deduction | CHF 26,460 | 7/8 of the maximum AVS pension |
| Max coordinated salary | CHF 64,260 | Bracket subject to mandatory contribution |
| Minimum interest rate | 1.25% | On the mandatory part, set annually |
Retirement credits — the share of your salary feeding your LPP savings — grow with age: 7% between 25 and 34, 10% between 35 and 44, 15% between 45 and 54, 18% between 55 and 65. This is the legal minimum. Many funds do better.
Where the money actually sits
There is no single fund in Switzerland. Around 1,380 active pension funds exist (FSIO 2022 figures) — employer funds, cantonal funds, branch funds, banks, private foundations. Each employer picks one. Every time you change employer, your past contributions must be transferred to the new fund, or, failing transfer, to a vested benefits foundation.
When the money gets lost
Three key moments, almost always the same:
- Change of employer without communicating the new fund in time. The assets are sent by default to the supplementary institution.
- Period without employment (unemployment, sabbatical, extended maternity). The account keeps existing, but with no new contributions.
- Departure from Switzerland (cross-border commuters going home, expats moving on). You can withdraw, you can leave it. When in doubt, many leave — and forget.
How you recover it
A signed power of attorney in your name, sent to the Central 2nd-Pillar Office (which centralizes orphan assets) and to the 340 vested benefits foundations. Reply in 4 to 6 weeks. Doable on your own. Also what Pillarum does for you, free of charge, by pooling the procedure.
How much it represents, at the country level
| Indicator | Value | Source |
|---|---|---|
| Centralized dormant assets | CHF 6 billion | Auffangeinrichtung BVG — 2024 report |
| Contactless accounts | ~950,000 | Auffangeinrichtung BVG 2024 |
| Active pension funds | ~1,380 | FSIO — 2022 statistics |
| Vested benefits foundations | ~340 | FSIO / FINMA — Register |
Nearly 950,000 vested benefits accounts are now contactless in Switzerland, totaling CHF 6 billion in dormant assets at the Auffangeinrichtung BVG. These are not edge cases: it is a mass phenomenon, driven by professional mobility and by the opacity of the system for individuals.
- 01The 2nd pillar is mandatory from CHF 22,680/year of income in Switzerland — funded half by the employer, half by the employee.
- 02Assets are spread across ~1,380 funds + 340 foundations — no single counter. Every change of employer can create an "orphan" account.
- 03When you leave Switzerland for the EU/EFTA, only the extra-mandatory part is withdrawable. The rest stays locked in vested benefits in CH.
- 04To recover all your assets, you must query the three actors: funds, foundations, Central 2nd-Pillar Office.
Going further
We have published detailed guides on vested benefits, on the mandatory/extra-mandatory split, on reading the annual certificate, and on cross-border workers returning home. If you prefer to check your situation directly, the chat completes the search in 5 minutes.