In Switzerland, the term coordinated salary denotes the portion of a salary on which compulsory occupational pension fund contributions must be paid.
Currently, the portion of an annual salary which falls between 25,725 francs and 88,200 francs makes up the coordinated salary.
In Switzerland, employees must be subscribed to their employer’s occupational pension fund if their salary exceeds 22,050 francs per year. For employees who earn between 22,050 and 25,725 francs per year, the minimum coordinated salary of 3675 francs applies.
Compulsory pension fund contributions are always based on your coordinated salary. That means you and your employer are not obligated to pay contributions on the portions of your salary which fall below and above your coordinated salary.
The standard, compulsory pension you receive when you retire will only be based on your coordinated salary. The sums insured by the standard, compulsory disability insurance and survivor’s insurance which you get from your pension fund are also based on your coordinated salary.
If your actual salary exceeds your coordinated salary, you are entitled to make voluntary contributions based on the portion of your salary which exceeds the coordinated salary threshold. The tax privileges which apply to compulsory contributions and benefits (pillar 2a) also apply to voluntary contributions and benefits (pillar 2b).
More on this topic:
Disability insurance in Switzerland explained
Compare Swiss retirement funds now
Compare Swiss vested benefits accounts
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