Extra-mandatory portion of retirement capital

In the Swiss pension system (2nd pillar), the extra-mandatory portion refers to the portion of retirement capital that exceeds the minimum requirements stipulated in the Federal Law on Occupational Retirement, Survivors' and Disability Pension Plans (BVG). While the mandatory portion guarantees salary contributions between 22'680 and 90'720 francs (as of 2026), the extra-mandatory portion allows for more comprehensive pension provision.

This can be achieved in two ways: either an employer insures salary components that exceed the BVG maximum of 90'720 francs, or the pension fund offers more attractive conditions than required by law, for example through higher savings contributions, waiving the coordination deduction, or insuring income below the entry threshold.

A key difference lies in flexibility: in the extra-mandatory scheme, the funds are not bound by the statutory minimum interest rate or the fixed conversion rate of currently 6.8 percent. The usually lower conversion rates in the extra-mandatory scheme lead to lower pensions. This is because the decisive factor for pension formation is the so-called enveloping conversion rate. This combines the rates from the mandatory and extra-mandatory schemes.