Glossary
Coordination Deduction
The Coordination Deduction is a fixed amount subtracted from gross salary in occupational pension (BVG / 2nd Pillar) before the insured salary is calculated. It reflects the fact that a portion of income is already covered by the AHV (Old-Age and Survivors' Insurance) (1st Pillar), preventing double coverage.
At a glance
01
The Coordination Deduction equals 7/8 of the maximum AHV pension (source: BVG Art. 8).
02
The remaining salary after the deduction is called the coordinated or insured salary.
03
Many pension funds reduce the deduction proportionally for part-time employees.
Frequently asked questions
It ensures that the portion of income already covered by the AHV is not insured a second time through the pension fund. This establishes coordination between the 1st and 2nd Pillars and avoids duplication of benefits.
For low or part-time incomes, the deduction can result in only a small insured salary remaining. Many pension funds therefore reduce the deduction for part-time employment to avoid leaving employees with inadequate 2nd Pillar coverage.
Part of the topic
Vorsorge & Pensionierung
Sources: Bundesamt für Sozialversicherungen (BSV) · Systematische Rechtssammlung (fedlex)