1e Pension Plans: Choice and Own Risk
From what salary a 1e pension plan is possible, how the choice of investment strategy works, and why the insured person bears the investment risk alone, with no minimum interest and no capital guarantee.
Anyone earning a salary component above a statutory threshold can choose between several investment strategies within their occupational pension, instead of being subject to the pension fund’s collective asset management. The current version of Article 1e BVV2 has been in force since 1 October 2017 and governs these so-called 1e pension plans. This article assumes familiarity with the fundamentals of occupational pensions and focuses on the specifics of the 1e plan.
A 1e pension plan is an extra-mandatory pension solution under Article 1e of the Ordinance on Occupational Retirement, Survivors’ and Disability Pension Plans (BVV2), in which the insured person chooses from several investment strategies set by the pension institution and bears the opportunities and risks of performance alone. It is available exclusively for salary components that lie above a statutory threshold.
The most important points at a glance
- Threshold CHF 136,080 annual salary (2026): A 1e plan requires a pension institution that insures exclusively salary components above one and a half times the upper BVG threshold amount of CHF 90,720 (Source: Art. 1e para. 1 BVV2, Art. 8 para. 1 BVG).
- The employer decides: Whether a 1e plan is introduced is the employer’s decision, not the insured person’s.
- At most ten investment strategies: A pension institution may offer a maximum of ten strategies per affiliated pension fund (Source: Art. 1e para. 2 BVV2).
- No splitting: An individual’s retirement assets cannot be spread across several strategies at once (Source: Art. 1e para. 3 BVV2).
- No minimum interest, no guarantee: Unlike the mandatory BVG scheme, where the Federal Council sets a minimum interest rate (Source: Art. 15 para. 2 BVG), there is neither a statutory minimum interest rate nor a guarantee of the capital paid in for 1e balances.
- Actual value on departure, provided the regulations allow it: In this case, the actual value of the retirement assets is paid out, coupled with a duty to offer at least one low-risk strategy (Source: Art. 19a para. 1 FZG).
From what salary is a 1e plan possible?
A 1e plan is only permitted for pension institutions that insure exclusively salary components above one and a half times the upper BVG threshold amount (Art. 1e para. 1 BVV2). The upper threshold amount is CHF 90,720 in 2026 (Art. 8 para. 1 BVG), putting the threshold for 1e plans at CHF 136,080 in annual salary.
Only the salary component above this threshold may be managed under 1e rules. The lower part of the salary remains insured under the collective asset management of the mandatory scheme or an enveloping pension fund, as described in the BVG guide.
The decision to introduce a 1e plan does not lie with the insured person but with the employer: the employer affiliates with a pension institution that insures exclusively these high salary components, or has a corresponding affiliated pension fund set up. Without such an offering, the entire salary remains insured collectively, regardless of its amount. In practice, this mainly affects executive salaries and employees with substantial variable compensation components whose total income lies well above the salary insured under the mandatory BVG scheme.
How does the choice of investment strategy work?
The pension institution sets the investment strategies and may offer at most ten per affiliated pension fund, that is, per affiliated employer (Art. 1e para. 2 BVV2). The insured person chooses one of them but cannot customize it or alter its composition. An individual’s retirement assets also cannot be split across several strategies at once (Art. 1e para. 3 BVV2).
Under the ordinance, every strategy must be open to all insured persons in a given group; it may not be tailored to individual people (Art. 1e para. 5 BVV2). The investment result of a strategy is credited, according to uniform criteria, to the balances of everyone who chose that same strategy. This collectivity requirement prevents a 1e plan from becoming a fully individualised form of asset management.
Who bears the investment risk in a 1e plan?
In a 1e plan, the insured person bears the investment risk alone. Unlike the mandatory BVG scheme, where the Federal Council sets a minimum interest rate on the retirement credit (Art. 15 para. 2 BVG), there is no statutory minimum interest and no guarantee of the capital paid in for 1e balances.
The return results solely from the actual investment performance of the chosen strategy. With an equity-heavy strategy, the balance can fall below the sum of contributions paid in during a weak stock market year. This trade-off is the core of the 1e model: freedom of choice in investing is set against full exposure to price fluctuations, without the safety net that collective management provides under the mandatory scheme.
What happens when leaving a 1e plan?
If the pension institution’s regulations provide for it, the insured person receives on departure not the statutory minimum amount under Art. 15 and 17 FZG, but the actual value of the retirement assets at the time of departure (Art. 19a para. 1 FZG). If performance was negative, this can also be less than the contributions paid in.
If the pension institution uses this exception, it must offer at least one strategy with low-risk investments (Art. 19a para. 1 FZG). Under the ordinance, low-risk investments are chiefly cash in Swiss francs and claims of good credit quality with an average term of no more than five years (Art. 53a BVV2). In addition, the termination benefit no longer earns interest from the time it becomes due (Art. 19a para. 3 FZG).
How a withdrawal from a 1e plan is taxed depends on the individual situation and canton of residence, and can change.
Frequently asked questions about 1e pension plans
What is the difference between a 1e plan and the mandatory BVG scheme?
Under the mandatory BVG scheme, the pension fund manages the retirement credit collectively, and the Federal Council sets a statutory minimum interest rate. In a 1e plan, the insured person chooses an investment strategy from a defined menu and bears the opportunities and risks of performance alone. There is no minimum interest or capital guarantee for 1e balances.
From what annual salary is a 1e plan possible?
A 1e plan requires a pension institution that insures exclusively salary components above one and a half times the upper BVG threshold amount (Art. 1e para. 1 BVV2). In 2026 this threshold amount is CHF 90,720, putting the 1e threshold at CHF 136,080 in annual salary (Art. 8 para. 1 BVG). A high salary alone is not enough; the employer must offer such a plan.
How many investment strategies may a pension institution offer?
A pension institution may offer at most ten investment strategies per affiliated pension fund (Art. 1e para. 2 BVV2). Every strategy offered must be open to all insured persons in the relevant group; it may not be tailored to individual people. An individual’s retirement assets also cannot be split across several strategies at once.
What happens to the 1e balance when changing employer?
If the pension fund’s regulations provide for it, the actual value of the retirement assets is paid out on departure instead of a statutory minimum amount, and the pension institution must then also offer at least one low-risk strategy (Art. 19a para. 1 FZG). If performance was negative, this payout can be lower than the sum of contributions paid in.
Who decides whether a 1e plan is available?
The decision lies with the employer, not the insured person. The employer affiliates with a pension institution that insures exclusively salary components above the statutory threshold, or has a corresponding affiliated pension fund set up. Without such an offering, the entire salary remains insured collectively, even if it is well above CHF 136,080.
Must a low-risk investment strategy be available to choose?
Yes, provided the pension institution pays out the actual value instead of a minimum amount on departure. It must then offer at least one strategy with low-risk investments (Art. 19a para. 1 FZG). Low-risk investments are chiefly cash in Swiss francs and claims of good credit quality with an average term of no more than five years (Art. 53a BVV2).
Sources
- Ordinance on Occupational Retirement, Survivors’ and Disability Pension Plans (BVV2, SR 831.441.1), Art. 1e and Art. 53a
- Federal Act on Occupational Retirement, Survivors’ and Disability Pension Plans (BVG, SR 831.40), Art. 8 and Art. 15
- Federal Act on Vesting in Occupational Old Age, Survivors’ and Disability Pension Plans (FZG, SR 831.42), Art. 15, 17 and 19a
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This article is for general information purposes only and does not constitute investment advice or an offer to buy or sell financial instruments. Everon AG is a wealth manager licensed by FINMA under FinIA. Past performance is not a reliable indicator of future returns.
