Pensions made simple · Episode 8

How your capital
becomes your pension

Capital × conversion rate = annual pension.

500,000Retirement capital CHF
× 6.8 %Conversion rate
= 34,000Annual pension CHF, for life
The catch

6.8 % does not apply to everything

Mandatory

  • 6.8 % guaranteed by law
  • At ordinary retirement
  • Only on the BVG savings

Extra-mandatory

  • Rate set freely by the fund
  • Blended: often close to 5 %
  • Early retirement: additional reduction
The trend

Living longer, lower rates

DemographicsLonger life spreads the capital over more years
Early retirementlower conversion rate – level depends on the pension fund (rule of thumb −0.15 to −0.2 points per year)
ComparisonRates vary widely between funds
The second lever

Interest: your third contributor

1.25 %
BVG minimum interest 2026 on mandatory savings – good funds pay more
The bottom line

The fund makes the difference

Same salary ≠ same pension. Benefit plan, interest policy and conversion rate decide. When changing jobs, put the pension fund on your checklist.
Good to know

Know your rate

💡 Read the regulations or ask. Conversion rate per retirement age, interest policy, funding ratio – three questions for your fund.
Request a consultation

This video is no substitute for personal advice.
Baeriswyl Beratungen GmbH · Finance & pension planning · Fribourg

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