What is the coordination deduction?
According to the Swiss pension system, only benefits that are not already covered by the 1st pillar should be insured in the 2nd pillar. The coordination deduction ensures this, and it is deducted from the gross salary. This results in the coordinated BVG salary – i.e. the amount on which BVG contributions are actually paid.
The coordination deduction is the same for all employees and is set by the Federal Council. It currently amounts to 7/8 of the OASI maximum pension, i.e. 25,095 francs. With a gross annual salary of 75,000 francs, the coordinated BVG salary is therefore 49,905 francs.
The fact that the coordination deduction is the same for everyone has disadvantages for part-time employees in particular. For a gross annual salary of 35,000 francs, for example, the coordinated BVG salary is just under 10,000 francs. However, employers have the option of adjusting the coordination deduction in line with the percentage worked, in order to better position part-time employees.
The minimum coordinated BVG salary is 3,585 francs, and the maximum is 60,945 francs. If you wish to insure salary components above this amount, you can specify this in your retirement provision strategy.