Increase in the BVG interest rate from 1.25% to 2% with effect from 1 January 2027, and what this means for your savings
At the end of August 2026, the Federal Commission for Occupational Pension Provision recommended to the Federal Council that the BVG minimum interest rate for occupational pension provision be increased from 1.25% to 1.75%. At its meeting on On 4 November 2026, the Federal Council decided, and even to raise the minimum interest rate to 2% from January 2027.
The BVG minimum interest rate determines the minimum percentage rate at which interest must be paid on BVG retirement savings. In other words, it is the statutory minimum. The BVG minimum interest rate is set by the Federal Council.
The interest rate applied to retirement savings held outside the mandatory scheme – the so-called ‘over-mandatory’ portion – is not set by the Federal Council, but by the governing body of the relevant pension fund.
The following calculation shows how an increase in the BVG minimum interest rate from the current 1.25% to 2% could affect pension savings based on a reference age of 65.
Example
Ms Zinsli is 34 and currently has BVG savings of CHF 35,000. The assumptions are based on a maximum coordinated salary of CHF 65,280 from 2027 onwards, statutory savings contributions of 7%, 10%, 15% and 18%, and annual interest accruals.
| Position | 1.25 % | 2.00 % | Difference |
|---|---|---|---|
| BVG savings at age 34 | CHF 35,000 | CHF 35,000 | |
| BVG savings at 65 | CHF 397,628.00 | CHF 452,052.00 | +CHF 54,424.00 |
In its communication, the Federal Council also points out that, according to estimates by the Federal Social Insurance Office (FSIO), pension funds are estimated to have achieved an average return of 6.1 % in 2025 and 5.4 % from January to the end of August 2026. Accordingly, their financial position is extremely sound: according to the BSV, the average funding ratio of pension funds without a state guarantee stood at an estimated 122.5 % at the end of August 2026. This means that, on average, pension funds have more than the required value fluctuation reserves and sufficient funds to meet their obligations. This exceptionally strong financial position creates scope for a significant increase in the minimum interest rate. At the same time, this will help to offset the overall rise in inflation since 2022.