Switzerland’s federal commission for occupational pensions, BVG-Kommission, has recommended raising the minimum interest rate on retirement savings by 0.50 percentage points to 1.75% for 2027.
The minimum interest rate is based on the performance of federal bonds, equities and real estate.
Financial markets performed well in 2025 and have continued to show positive trends so far in 2026, the commission said in support of the proposed increase.
The generally sound financial position of pension funds also supports a higher rate, despite ongoing uncertainties, including geopolitical risks, it added.
Other factors considered by the commission include wage trends, inflation, returns achieved by pension schemes and their target returns.
Inflation rose 0.8% in August compared with the same month a year earlier, according to figures from the Federal Statistical Office (FSO).
The Swiss employers’ association welcomed the BVG-Kommission’s recommendation but called for the increase to be implemented in smaller steps, citing pension institutions’ limited financial flexibility and geopolitical uncertainties.
The geopolitical situation, US tariff policy and wars create uncertainties that justified a “conservative determination” of the minimum interest rate, the association said.
The Swiss Trade Union Confederation (SGB) also welcomed the commission’s recommendation but continued to demand a 3% minimum interest rate, arguing that pension funds are very well funded.
The Federal Council is expected to decide on the recommendation in the autumn.
The minimum interest rate applies to the mandatory portion of occupational pension savings, known as the BVG Obligatorium, for members earning at least CHF22,680 (€24,600).
