When is the LPP compulsory?
In Switzerland, the employer must affiliate with a provident institution employees already subject to AVS whose annual salary exceeds the LPP entry threshold. In 2026, this threshold is CHF 22,680. Death and disability risk coverage begins at the earliest on January 1 following the 17th birthday; Old age savings start at the earliest on January 1 following the 24th birthday.
The obligation also depends on the duration of the employment relationship. Short contracts may be treated differently depending on the LPP rules and the fund regulations. The salaried managers of an SA or Sàrl are in principle treated like other employees, while the LPP is optional for self-employed people without staff.
Key figures 2026
- LPP entry threshold: CHF 22,680 annual salary.
- Coordination deduction: CHF 26,460 per year.
- Mandatory maximum annual salary: CHF 90,720.
- Minimum coordinated salary: CHF 3,780.
- Maximum coordinated salary: CHF 64,260.
- Financing: the employer must pay at least as much as all employees for LPP contributions.
What professional insurance covers
The LPP completes the 1st pillar and covers three risks: old age, disability and death. For employees, it constitutes an important part of future retirement. For the company, it represents an administrative obligation, a salary cost and a strong element of loyalty.
The pension plan defines contributions, benefits in the event of disability or death, employer-employee distribution, redemption possibilities, remuneration of assets and departure conditions. A minimum fund complies with the law; a well-designed plan can greatly improve the protection and attractiveness of the employer.
Mandatory or extra-obligatory: what’s the difference?
The obligatory part respects the legal minimums. The non-mandatory part allows us to go further: ensure salaries beyond the ceiling, reduce or eliminate the coordination deduction, improve savings bonuses, strengthen death/disability benefits or create framework plans. The remuneration and conversion conditions can vary greatly depending on the pension institution.
The decisions that change everything
- Type of crate: comprehensive insurance, collective foundation, semi-autonomous solution or more individualized plan depending on size and risk profile.
- Coordination deduction: standard, adapted to the occupancy rate or eliminated to better cover part-time work.
- Employer contribution: legal minimum of 50% or higher employer share to strengthen the social advantage.
- Framework plan: better coverage for high salaries, reinforced risk benefits or 1e solutions for certain high incomes.
- Administrative management: entry/exit announcements, salary variations, pension certificates, buyouts and communication to employees.
- Coordination: LPP, LAA, loss of salary due to illness, executive insurance and private pension provision must work together.
When to optimize your LPP?
A review is useful when creating the company, the first commitment, an increase in staff, an increase in salaries, a transition to SA/Sàrl, the arrival of executives, or if employees do not understand their services. It is also relevant when fees, remuneration, conversion rate or risk benefits no longer meet your expectations.
Our support
Finwise compares pension institutions according to your structure, your payroll, your average age, your HR needs, your executives and your risk tolerance. We help you read the regulations, understand the costs and choose a BVG solution that your employees can actually understand.