LPP mandatory and extra-mandatory: the difference everyone confuses.
On your certificate, your LPP assets are split in two. The mandatory and extra-mandatory parts do not follow the same rules — especially when leaving Switzerland.
When you look at your pension certificate, your LPP assets are split in two: mandatory part and extra-mandatory part. The distinction looks cosmetic. It is not. When leaving Switzerland, or withdrawing capital, these are two different legal regimes.
Where the split comes from
The Federal Act on Occupational Pensions (LPP) imposes a minimum on every pension fund. This minimum has two dimensions: how much is contributed (on which salary bracket) and how much the money earns each year.
Anything beyond that minimum is the extra-mandatory part. The employer or the fund decides to offer it — typically because the industry's collective agreement requires it, or because the company wants to enhance its package.
1. Contribution: on which salary bracket
The mandatory LPP contribution does not apply to your entire salary. It applies to the coordinated salary, i.e., your capped AVS salary, minus a coordination deduction (corresponding to 7/8 of the maximum AVS pension, and therefore varying every two years).
| Parameter | 2025 amount | Definition |
|---|---|---|
| Entry threshold | CHF 22,680 | Minimum annual salary to be enrolled |
| Considered AVS salary | CHF 90,720 | Salary cap used for the calculation |
| Coordination deduction | CHF 26,460 | Subtracted from the AVS salary to obtain the coordinated |
| Maximum coordinated salary | CHF 64,260 | Maximum bracket subject to mandatory contribution |
| Minimum coordinated salary | CHF 3,780 | Floor if the actual coordinated is lower |
Concretely: if you earn CHF 120,000, only the coordinated part (CHF 64,260 max) enters the mandatory calculation. For the remaining CHF 56,000, your fund may offer extra-mandatory coverage. Many do, especially for executives and generous collective agreements.
2. Yield: minimum interest rate
On the mandatory part, the Federal Council sets each year a minimum interest rate. For 2024 and 2025 it is 1.25%. A floor: the fund can pay more, never less.
On the extra-mandatory part, no legal minimum. The fund pays what it wants. In years of good returns, some funds pay a higher rate on the extra-mandatory to compensate. In a crisis, they can on the contrary lower the extra-mandatory to zero to preserve the mandatory coverage.
| Period | Minimum mandatory rate | Extra-mandatory |
|---|---|---|
| 2014 | 1.75% | Free — varies by fund |
| 2015–2016 | 1.75% | Free |
| 2017–2023 | 1.00% (then 1.00–1.25%) | Free |
| 2024 | 1.25% | Free |
| 2025 | 1.25% | Free |
3. On leaving Switzerland, that is where it gets tricky
You leave Switzerland to settle in France, Germany, Italy, or elsewhere in the EU/EFTA. You want to withdraw your 2nd pillar. The result depends on the mandatory/extra-mandatory split.
- Outside EU/EFTA (United Kingdom, United States, Canada, Asia…): full payment possible, mandatory and extra-mandatory combined. (FZG art. 5 para. 1 let. a)
- EU/EFTA (France, Germany, Italy, Portugal, Spain, etc.): the mandatory part stays locked in Switzerland, on a vested benefits account. The extra-mandatory part can be paid out in cash. (FZG art. 25f, applying the AFMP)
A concrete example
12 years in Geneva in the banking sector, annual salary CHF 145,000. Decides to move back to her home country for family reasons.
- Total assets on the certificate
- CHF 184,000
- — of which mandatory part
- CHF 112,000
- — of which extra-mandatory part
- CHF 72,000
- Destination country
- France (EU)
- Cash payment possible
- CHF 72,000 = extra-mandatory part
- Locked in vested benefits CH
- CHF 112,000 = mandatory part, until retirement
- CH source taxation
- ~6–8% on the CHF 72,000, rate varies by foundation canton
Why the distinction also matters in divorce
At the time of LPP asset split in divorce (CC art. 122 ss), case law and funds make the distinction. Both parts are split, but their tax treatment at the time of payment differs, and the mandatory part retains its specific guarantees (minimum rate, EU/EFTA withdrawal conditions) after transfer.
How to check your split
On your annual pension certificate, find two separate lines: "Old-age assets per LPP" (the mandatory) and "Extra-mandatory assets" or "Total assets — LPP assets". The sum = your total assets.
If your certificate shows only one line, ask your fund for the breakdown. It is a right (LPP art. 86b). Without this breakdown, you cannot anticipate how much you will be able to withdraw on departure.
- 01The mandatory = minimum required by law, with a guaranteed interest rate each year.
- 02The extra-mandatory = everything beyond that — free rate, looser rules on leaving Switzerland.
- 03Leaving to the EU/EFTA: only the extra-mandatory can be paid out in cash. The mandatory stays in Switzerland.
- 04Leaving outside the EU/EFTA: full withdrawal of both parts.
To understand the whole system, read our introduction to the 2nd pillar. If you are leaving for your home country, the return-home guide covers the exact formalities.