What is the LPP used for?
The LPP, or occupational pension, is the 2nd pillar of the Swiss system. It supplements the AVS/AI to maintain part of the standard of living in retirement, in the event of disability or in the event of death.
Unlike the AVS, the LPP works by capitalization: the contributions of the employer and the employee fund a personal retirement asset. This asset will then be used to finance an annuity, capital or a combination of the two, depending on the rules of your fund.
The LPP 2026 parameters to know
- Entry threshold: compulsory affiliation from CHF 22,680 of annual salary with the same employer, for employees subject to AVS.
- Coordination deduction: CHF 26,460, subtracted from the annual salary to calculate the salary coordinated in the mandatory portion.
- Minimum coordinated salary: CHF 3,780 when the income exceeds the entry threshold but remains close to it.
- Mandatory maximum coordinated salary: CHF 64,260, or CHF 90,720 maximum salary taken into account less the coordination deduction.
- Minimum interest rate: 1.25% on mandatory LPP assets in 2026.
- Minimum conversion rate: 6.8% to transform the obligatory assets into an annual annuity.
Why your LPP certificate is essential
The pension certificate indicates your insured salary, contributions, retirement assets, projected pension, disability benefits, survivors' benefits and redemption potential. This is the document to read before making any retirement choice, real estate purchase or professional change.
It is necessary to distinguish between the compulsory part, subject to legal minimums, and the non-mandatory part, which depends more on the regulations of the fund. Two people with the same salary can therefore have very different benefits depending on the employer.
Decisions that have a strong financial impact
- Annuity or capital: the annuity secures an income for life, the capital gives more freedom but requires rigorous management.
- BVG redemption: a voluntary payment can reduce taxes and improve benefits, but the three-year tax block must be checked before a capital withdrawal.
- Early retirement: it often reduces the assets, the conversion rate and the expected income.
- Delayed retirement: it can increase the pension if you continue to work and if the regulations allow it.
- Owned accommodation: Early withdrawal or pledging can help finance an asset, but also reduces foresight.
- Change of employer: it is necessary to control the transfer of vested benefits and the quality of the new fund.
Disability and death: what the LPP can provide for
The LPP is not only for retirement. It can pay a disability pension, children's pensions, a spouse's or registered partner's pension, orphan's pensions and sometimes a death benefit. The exact conditions depend on the regulations of your fund and your family situation.
For unmarried couples, blended families and the self-employed, it is particularly important to check beneficiaries, cohabitation conditions, notification deadlines and possible gaps.
When to request an LPP analysis?
- Before a major purchase in the pension fund.
- Before choosing annuity, capital or combination at retirement.
- Before a LPP withdrawal to finance housing.
- During a divorce, marriage, birth or long-term cohabitation.
- When transitioning to part-time, independence or a management position.
- If your salary exceeds the well-insured part of the compulsory LPP.
Our support
Finwise reads your LPP certificate with you, identifies retirement, disability and death gaps, compares redemption options, measures the tax impact and coordinates your 2nd pillar with pillar 3a, pillar 3b and useful private insurance.
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