Thanks to sound investments, 2025 was a lucrative year for second-pillar pensions – including for foreign workers employed in Switzerland. And they will benefit in 2026.
In 2025, Swiss pension funds – and particularly the second-pillar – reached an average coverage rate of 117.1 percent, compared to 114.7 percent the previous year.
As a result, “insured persons benefit [in 2026] from an increase in interest on their assets, with an average rate of 4.33 percent,” the High Supervisory Commission for Occupational Pensions (SCOP) announced on May 12th.
If you are a foreign national retired in Switzerland but have paid into the second-pillar plan while working in the country (read more about this below), then you will partake in this profit as well.
Where did this windfall come from?
Contributions to the second-pillar pensions are invested by the government in capital markets to generate returns, compound interest, and dividends. They are then credited to the employee’s account.
Income was generated in 2025, even though “for pension institutions, the environment remains volatile. Geopolitical conflicts and the economic uncertainties of 2025 have caused more pronounced fluctuations in the markets,” the SCOP pointed out.
Overall, however, “thanks to the strengthening of their reserves to absorb value fluctuations, most institutions are currently well prepared to cope with, or mitigate, more challenging market phases” – which is good news for current and future retirees, at least for the immediate future.
The three-pillar system
As a reminder, Switzerland’s pension system is based on the three-pillar principle: state pension (first pillar), occupational pension (second), and private pension (third).
While the first one, also known as AHV/AVS is compulsory for all employed and self-employed people, the second is obligatory under certain circumstances, and the third is completely voluntary.
Regardless of your nationality, you are obligated to pay into the second-pillar scheme if you are at least 17 years old, already contribute to the state pension, and earn at least 22,680 francs a year in fixed employment.
READ MORE: What is Switzerland’s ‘second pillar’ pension and how you will benefit from it?
And there is more good news this year on the pension front
Starting in December 2026, all retirees in Switzerland will receive the 13th payment of the state pension, after this move was approved in a referendum in March 2024.
This payment will be of the same amount as the regular monthly AHV/AVS payment.
READ MORE: What will Switzerland’s new ’13th pension’ mean for you?
