- The legal rate of 6.8% only applies to the mandatory part of your capital.
- Across the whole capital, the median among funds was 5.1% in 2024: that is the realistic figure.
- Your fund's rate is in your pension fund regulations: ask for it, it changes your pension by several hundred francs a month.
Your pension from your capital
Take the projected capital at 65 from your certificate, and your fund's rate: the pension is one step away. Example: on 500'000 francs, going from the legal rate to the median fund rate means more than 700 francs less pension every month.
Your pension: a month, before tax
Why your fund pays less than 6.8%
The law only protects part of your capital, the part built on salaries up to about 90'000 francs. For everything else, the extra-mandatory part, each fund sets its own rate, often much lower. The higher your salary, the more that part weighs, and the further your real rate is from 6.8%.
In practice, many funds apply a single rate to the whole capital, only guaranteeing that the mandatory part gets at least the legal minimum. The reason for the decline: we live longer than before, and bonds pay less. The legal rate was still 7.2% in 2000.
And if you manage the capital yourself?
Taking the lump sum and drawing the equivalent of the pension each month often lasts longer than people think. Example: you withdraw 500'000 francs, invest them prudently, and draw each month what a pension at a 5.5% rate would have paid. With a 3% net return, the money lasts about 26 years, so until 91 if you retire at 65. At 65, people live on average about twenty more years.
Two things can still reverse the calculation:
- Your spouse: with a pension, they receive about 60% of your pension for life if you die. With the lump sum, they inherit what is left.
- Tax: the pension is taxed every year as income. The lump sum is taxed once, at a reduced rate.
Three things to do before 64
- Ask for your pension fund regulations and find the rate applied to all your capital, not just the 6.8%.
- Buy in if you have a gap: it is deductible and raises your capital. Watch the 3-year period before a lump-sum withdrawal: see the pension fund buy-in.
- Compare lump sum and pension with your real figures, ideally from 55. The decision is communicated 3 to 6 months before retirement and is often final.
Going further
You do not have to choose all one or all the other. Most funds allow a mix: a pension to cover fixed costs, and a lump sum to keep flexibility or pass it on.
The pension fund pension is not indexed. Unlike AHV, it usually does not rise with inflation: over 20 years of retirement, its purchasing power falls noticeably. Invested capital can keep growing.
The rate may fall further before you retire. What counts is the rate in force in the year you leave, not today's. Funds have often cut it in stages in recent years: the figure on your current certificate may be optimistic.
Lump sum or pension: do the mathsWith your fund's rate, your capital and your horizon.
Open the calculatorYour next step
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Path “Planning your retirement” · step 3 of 8
Frequently asked questions
What is the BVG conversion rate?
The percentage applied to your pension fund capital to work out your annual pension. Monthly pension = capital × rate ÷ 12.
What is the legal conversion rate in 2026?
6.8%, set by the BVG (art. 14). It only applies to the mandatory part of the capital. Across the whole capital, the median among pension funds was 5.1% in 2024 (Swisscanto).
Why does my pension fund apply less than 6.8%?
The legal minimum only covers the mandatory part, built on salaries up to CHF 90'720 in 2026 (CHF 92'160 in 2027). For the extra-mandatory part, each fund sets its own rate. It has fallen as life expectancy rose and returns declined.
Where do I find my fund's rate?
In the pension fund regulations, which your employer must give you. Your annual pension certificate shows your projected capital at 65, and often the estimated pension.
Capital or pension: how do I decide?
It depends on your fund's rate, your family situation (the spouse's pension is about 60% of yours, for life), your health, your canton and whether you can manage capital over 20 to 25 years. There is no single right answer.
When do I have to choose between capital and pension?
Usually 3 to 6 months before retirement, and the decision is often irreversible. Start preparing from age 55.
Sources: BVG art. 14 (minimum conversion rate) ; FSIO, 2026 BVG limits ; Swisscanto, 2024 pension fund study (median effective rates) ; FSO, life tables. ViaVest calculations.