The BVG conversion rate is to be reduced to 6 percent.

With the BVG conversion rate, an annual pension is calculated from the pension fund's retirement savings. Currently, the BVG conversion rate is 6.8 percent. If it is up to the National Council, that should change soon.

How high is the annual retirement pension from the accumulated pension fund assets? The answer to this question depends on the BVG conversion rate.

Calculation of the pension with the BVG conversion rate

The BVG conversion rate is a fixed percentage that helps convert the retirement savings in the pension fund into the annual retirement pension. While the conversion rate in the area of above-minimum occupational pensions can be determined arbitrarily by the pension funds, the minimum conversion rate for mandatory occupational pensions is regulated by the Federal Law on Occupational Retirement, Survivors', and Disability Pensions (BVG). Currently, the BVG conversion rate is still at 6.8 percent. A rate of 6.8 percent means that those who have accumulated a retirement capital of CHF 100,000 will receive an annual pension of CHF 6,800.

National Council wants to lower the BVG conversion rate

Last week, the National Council approved the reform of the second pillar with 126 to 66 votes. As part of the BVG reform, the following changes are to be implemented:

Left parties have announced a referendum

Following the clear result in the National Council, the next step will be for the Council of States to decide on the BVG reform. However, left-wing parties, the Greens, and trade unions have already announced their intention to launch a referendum if the proposal is also confirmed in the Council of States. If a referendum is indeed launched, the BVG reform will go to the people.

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