What is meant by the term coordinated wage?

The coordinated wage is used to determine all pension benefits (retirement pension, disability pension and survivor's benefits) of a pension planning solution.

It is calculated by subtracting the coordination deduction from the income that is subject to AHV deductions. The purpose of the coordinated wage is to ensure that wage components that are already covered by the AHV (first pillar) are not insured again in the BVG (second pillar).

The coordination deduction is the same for all employees and is defined by law. It amounts to 7/8 of the maximum AHV retirement pension, currently CHF 25,725. Employees with a low income, often part-time workers, are at a disadvantage, in that their coordinated wage is relatively low following the coordination deduction. The employer has the option of adjusting the coordination deduction to the degree of part-time employment or even dispensing with it altogether. This increases the insured wage of part-time employees, they are able to save more for their retirement and they are better protected against the risks of disability and death.

The minimum coordinated BVG salary is CHF 3,675 francs, and the maximum is 62,475 francs. If you wish to insure wage components above this amount, this can be specified in the retirement provision strategy.