Coordination Deduction (Koordinationsabzug)

The Coordination Deduction (Koordinationsabzug) is a fixed amount deducted from your gross annual salary to calculate your insured salary (coordinated salary) for Pillar 2 (BVG/LPP) pension contributions in Switzerland. This deduction exists to avoid double insurance since Pillar 1 (AHV/AVS) already covers basic income needs.

For 2026, the coordination deduction is CHF 26,460 (7/8 of the maximum AHV annual pension). To find your insured salary: Gross Salary - CHF 26,460 = Coordinated Salary. Only the coordinated salary is subject to Pillar 2 contributions and benefits. Minimum insured salary is CHF 3,675 (even if calculation goes lower), and maximum is CHF 64,260 (gross cap at CHF 90,720 - CHF 26,460). Age-based contribution rates apply: 7% (25-34), 10% (35-44), 15% (45-54), 18% (55-65). Critical for part-time workers: the coordination deduction is NOT adjusted for part-time work, creating structural disadvantages—at 50% employment, only 41% of salary is insured vs. 71% at 100%, contributing to Switzerland's 37% gender pension gap.

Real-World Example If Stefan earns CHF 80,000 gross annually, his coordinated salary is CHF 80,000 - CHF 26,460 = CHF 53,540. At age 40 (10% contribution rate), his total Pillar 2 contributions are CHF 5,354/year (employee + employer split). His colleague earning CHF 30,000 has only CHF 3,675 insured (minimum, as CHF 30,000 - CHF 26,460 = CHF 3,540 < minimum), contributing CHF 368/year—proportionally far less retirement savings.