BVG

The abbreviation BVG stands for the Federal Law on Occupational Retirement, Survivors' and Disability Pension Plans in Switzerland. It forms the legal basis for the second pillar in the Swiss three-pillar system. The main objective is to enable insured persons to maintain an adequate standard of living after retirement or in the event of disability.

The BVG sets minimum standards for pension fund benefits. Compulsory insurance applies to all employed persons who are insured under the first pillar (AHV) and earn an income above the BVG entry threshold. It is financed by salary contributions shared between employers and employees. The capital saved accrues interest on an individual basis and is paid out in old age either as a lifetime pension, a lump-sum capital payment, or a combination of both. The BVG thus supplements the state pension provided by the AHV and, together with the latter, is intended to secure around 60 percent of the last income.

In our three-part blog series, we take a closer look at the BVG.

https://www.truewealth.ch/blog/introduction-to-occupational-pension-plans-bvg