What the pension certificate shows
The certificate from your pension fund summarises your occupational pension in the second pillar (BVG). Most funds send it once a year, often at the start of the year, and again after important changes such as a salary adjustment or a buy-in. Layout and terminology differ from fund to fund, but the core elements are almost always the same.
- Personal details and level of employment
- Salary details: reported annual salary, coordination deduction, insured salary
- Contributions from you and your employer
- Current retirement savings and projected retirement benefit
- Risk benefits in the event of disability and death
- Vested benefits, buy-in potential and any withdrawals for home ownership
The certificate is hard to read less because of the numbers than because of the jargon. Once you know the terms, you can see in a few minutes where to look more closely.
Reported and insured salary
The reported annual salary is what your employer declares to the fund. In the statutory minimum, the coordination deduction, equal to seven-eighths of the maximum AHV old-age pension, is subtracted from it. The reason is that part of your income is already covered by the AHV. What remains is the insured or coordinated salary, on which contributions and most benefits are calculated.
Many funds depart from this in your favour, for example with a lower deduction or one adjusted to your level of employment. This matters especially for part-time employees, whose insured salary would otherwise be very low.
What to check
Do the annual salary and level of employment match your employment contract? Are bonuses or allowances insured? People with several part-time jobs may be insured with none or only some of their employers and should look into this specifically.
Retirement savings and projected benefit
Your retirement savings grow through annual retirement credits and interest. The law sets minimum rates that rise with age; many funds provide higher rates.
| Age | Statutory minimum retirement credit as a percentage of coordinated salary |
|---|---|
| 25 to 34 | 7% |
| 35 to 44 | 10% |
| 45 to 54 | 15% |
| 55 to reference age | 18% |
The projected retirement benefit shows the capital or pension you can expect at retirement. The pension is calculated by multiplying the capital by the conversion rate. In the mandatory part this is at least 6.8 percent; many funds apply a lower, so-called enveloping rate to the entire savings. Note that the projection is based on assumptions about salary and interest and is not a guarantee.
Risk benefits for disability and death
These items are often skipped, yet for many households they are the most important. They show what is paid out in the event of incapacity for work or death:
- Disability pension: annual pension for full incapacity, reduced accordingly for partial incapacity
- Disabled person’s child pension for each dependent child
- Spouse’s or partner’s pension on death
- Orphan’s pension
- Any additional lump sum on death
A pension gap exists where these benefits, together with AHV and IV (disability insurance), do not match your needs, for example because of a mortgage, young children or a partner without their own income.
Cohabiting couples: rarely covered automatically
Unmarried partners only receive survivors’ benefits if the fund’s regulations provide for them and the conditions are met. Often a written notification to the fund during your lifetime is required. Check this actively.
Buy-ins, home ownership and changing jobs
The buy-in potential shows how much you could voluntarily pay in to close gaps. Buy-ins are generally deductible from taxable income. Anyone who then withdraws capital must observe a three-year blocking period, otherwise the tax deduction may be reversed. Any advance withdrawal or pledge for home ownership is also shown and reduces benefits until it is repaid.
The vested benefit is the amount transferred to the new fund or to a vested benefits account when you change jobs.
Checklist for the annual review
- Check personal details, marital status and level of employment.
- Compare the salary with your salary certificate.
- Understand how your retirement savings changed from the previous year.
- Compare risk benefits with your family’s needs.
- Check beneficiaries and any partner notification.
- Discuss buy-in potential and tax consequences with a professional if needed.
Frequently asked questions
How often do I receive the pension certificate?
Where should I start reading?
Is the projected pension guaranteed?
What does the vested benefit mean?
Is a voluntary buy-in worthwhile?
This article provides general information. The regulations of your pension fund and the statutory provisions in force are authoritative.