Choosing a BVG solution: what matters and why commissions distort the choice

For many employees, the pension fund is the largest asset they own, often larger than what sits in their savings account or pillar 3a. Yet it is chosen by the employer, and in small businesses often in passing: the fiduciary recommends a solution, a broker brings two quotes, and whatever involves the least work gets signed. This decision affects the retirement savings of all employees for years, including your own if you run your business as a GmbH or AG.

This article explains your obligations as an employer under the Occupational Pensions Act (BVG), how the solutions on the market differ, which criteria count when comparing them and how a tender works. Figures refer to 2026.

Your obligations as an employer

If you employ people whose annual salary with you exceeds CHF 22,680 (entry threshold, as of 2026), you must join a registered pension scheme. This also applies to you if you are the managing partner of your GmbH or AG and pay yourself a corresponding salary. Cover against death and disability starts on 1 January after the 17th birthday, and retirement savings start on 1 January after the 24th birthday.

You bear at least half of the contributions. More is permitted and common in many companies; less is not. In the mandatory part, the insured salary is the AHV salary minus the coordination deduction of CHF 26,460 (as of 2026). Many pension plans deviate from this, for example with a lower coordination deduction or one adjusted to the level of employment, which mainly benefits part-time staff.

Two obligations are often overlooked. First, you must choose the pension scheme in agreement with your staff; the same applies if you later terminate the affiliation agreement and switch. Second, the AHV compensation office checks whether you are affiliated. If you are not, you will be assigned to the Substitute Occupational Benefit Institution (Stiftung Auffangeinrichtung BVG), retroactively and with the costs that this entails.

Collective foundation, joint foundation, association scheme

Small and medium-sized businesses rarely have their own pension fund. They join an institution that insures many employers. There are two basic forms.

In a collective foundation (Sammelstiftung), each affiliated employer has its own pension unit with separate accounts. Depending on the foundation, your pension unit has its own interest rate and even its own funding ratio. This allows a plan that fits your company; it also means that an unfavourable claims history, such as several disability cases, feeds directly into your premiums.

In a joint foundation (Gemeinschaftsstiftung), all employers share one common pool. There is one funding ratio, one interest rate and usually a choice of standard plans. Risks are spread across all companies, which is often more stable for small businesses with few insured people.

There are also association schemes for individual sectors. Some are inexpensive and well suited to the sector, but occasionally they are simply the solution chosen out of habit, without ever having been compared.

Full insurance or semi-autonomous

The second major distinction concerns who bears which risk.

With full insurance, a life insurance company takes on all risks, including investment risk. There is no underfunding, no restructuring measures and the assets are fully covered at all times. The price: the insurer must invest very cautiously and hold a lot of capital. The interest credited to retirement savings is therefore usually close to the legal minimum rate, which is 1.25 percent in 2026. Only a few insurers still offer full insurance.

With a semi-autonomous solution, the foundation bears the investment risk itself and only insures the risks of death and disability with an insurer. It can invest more in equities and real estate and, in good investment years, often credits considerably higher interest to retirement savings than full insurance does. In poor stock market years, however, it can fall into underfunding, in extreme cases with restructuring contributions from employer and employees.

For most small businesses today, a semi-autonomous collective or joint foundation is the standard. Full insurance can make sense if you want to rule out any possibility of restructuring and are willing to give up interest for it. You should weigh this up deliberately, not simply because it was in the first quote.

Criteria for comparison

Quotes look similar at first glance and differ greatly in the detail. These points deserve a close look:

• Costs: administrative costs per insured person and year, plus the asset management costs shown in the annual report. They are not presented the same way in every quote; they only become comparable once converted to the same basis.
• Risk premiums: what does insuring death and disability cost for your workforce? There are considerable differences between providers for the same benefits.
• Interest: how much interest was credited to retirement savings over the last five to ten years, in the mandatory and extra-mandatory parts? A single good year says little.
• Conversion rate: in the mandatory part, the legal rate is 6.8 percent. Rates for the extra-mandatory part are not regulated, and many foundations apply a lower, enveloping rate to the entire balance. For employees who want to draw a pension, this is a key point.
• Funding ratio and reserves: a funding ratio above 100 percent says little on its own. What matters is whether the fluctuation reserve is filled, which technical interest rate is used and how high the proportion of pensioners is. A foundation with many pensioners has to use part of its returns for their pensions.
• Plan design: can the coordination deduction, savings contributions and optional plans be set to suit your staff?
• Contract: notice period, minimum term and what happens to pensioners when you leave. Many people only read these points when they want to switch.

Why commissions can distort the choice

Most SMEs find their pension fund through a broker or insurance intermediary. For the employer this seems free of charge. The broker, however, is paid by the pension scheme, with a commission that is often calculated as a percentage of contributions or as an amount per insured person, every year for as long as the contract runs. These costs flow into the foundation's administrative costs and are therefore ultimately borne in part by the insured.

This does not have to lead to a poor solution. But it creates an incentive that does not fully match your interest: providers that pay no or lower commissions appear less often in the selection, and a switch that would deprive the broker of ongoing remuneration is rarely recommended. The law requires intermediaries to disclose the type and source of their remuneration (Art. 48k of the BVV 2 ordinance). In practice it pays to ask actively and request the answer in writing: how high is the commission, how is it calculated, and which providers were approached?

How a tender works

A proper tender usually follows these steps:

1. Record the starting position: workforce with ages, salaries and levels of employment, the existing pension plan, ongoing disability cases and pensioners.
2. Define requirements: which benefits should be insured, how high should savings and risk contributions be, and what is your risk tolerance for investments?
3. Approach providers: several collective and joint foundations with identical documents, so that the quotes are comparable.
4. Evaluate quotes: bring costs, premiums, interest and contract terms onto the same basis and weight them.
5. Decide together with staff: employees or their representatives must agree to the affiliation. A short briefing on the main differences builds trust here.
6. Implementation: sign the affiliation agreement, terminate the existing contract on time, usually at year end with six months' notice, and oversee the transfer of assets.

For a newly founded company some of these steps fall away, but the logic remains the same. Anyone who only realises after founding that they need a pension fund often has little time; in our experience a tender takes a few weeks.

How we can help

In the BVG analysis we run the tender for you: we record your starting position, obtain the quotes, make them comparable and discuss the choice with you. We work exclusively for a fee and accept no commission from any pension scheme.