It’s important to us to explain the complex topic of the occupational benefit scheme as comprehensibly as possible. However, sometimes we cannot get around using technical terms. In our glossary we explain these technical terms briefly and in a reader-friendly manner.



Cantonal bank

Cantonal banks are created through application of cantonal laws. Most cantonal banks are constituted under public law and possess their own legal personality.

Capitalization system

Method of pre-financing in which capital reserves are created to cover anticipated future capital expenditure resulting from certain legal relationships. Each person saves for themselves. This technique implies the creation of reserves in contrast to a pay-as-you-go distribution system which consists of covering expenditure by contributions as they are received.

Cash payout (BV)

Occasionally in occupational pension schemes, a cash payout equal to the value of the termination benefits is permitted.

Commencement of a contract

The point in time at which the contract is concluded on the basis of the acceptance of a binding application.

Contribution gap

Difference between the contribution years owed and contributions made for old age and survivors insurance. Individuals with contribution gaps only receive a partial pension.

Coordinated salary

The BVG coordinated salary is the part of the salary which, as stipulated in the BVG (Occupational Insurance), must be insured.

The amount to be insured lies between 87.5% (7/8ths) of the maximum AHV (OASI = Old Age & Survivors Insurance) pension (coordination deduction) and 300% of the AHV (OASI) pension (BVG - Salary maximum).

To reach this coordinated salary in cases where salaries exceed the BVG salary maximum, the coordinated amount is deducted from BVG maximum. In cases where salaries are below the BVG maximum, the coordinated salary is deducted from the gross salary.

If the coordinated salary is less than 1/8th of the maximum AHV (OASI) pension (with salaries between the maximum AHV(OASI) pension and the entry threshold), then it is rounded-up to the minimal coordinated amount.

Coordination deductible

Part of a salary which, in the mandatory insurance defined by the BVG/LPP, cannot be insured. It corresponds to 7/8 of the maximum AHV/AVS pension.