When does the new 1.75% rate take effect?

The source does not specify an exact implementation date. The LPP Commission has forwarded the recommendation to the Federal Council, which has yet to formally decide. Once approved, the new rate applies to interest credited to LPP funds beginning with the first credit following the federal decision. Ask your employer or fund manager when they will notify employees of the change.

How does the increase from 1.25% to 1.75% affect my final capital?

Over long periods of accumulation (20-40 years), even modest percentage differences generate significant compound effects. An increase of 0.5 percentage points increases the guaranteed return on your paid contributions and interest already accrued. Use the pension calculator on our site to estimate the specific impact on your situation, entering your annual contribution and the years left in retirement.

Could my employer decide not to apply the new rate?

No. The minimum interest rate is set by the federal law on occupational pensions (LPP) and is binding. Once the Federal Council approves the increase to 1.75%, it becomes mandatory for all regulated pension institutions in Switzerland. However, many funds charge rates above the legal minimum, which is even more advantageous for you.

Is the new rate also valid for frontier workers like me, or only for Swiss workers?

It applies to all workers affiliated with a Swiss LPP, regardless of nationality and place of residence. If you are an Italian border worker enrolled in the pension fund of the Swiss company where you work, the new minimum rate of 1.75% applies to you like any other Swiss employee. The LPP does not discriminate on the basis of work permit (G, B or other).

LPP fee: minimum rate increase to 1.75% (cross-border guide)

Di Laura Bianchi · Published on 31 August 2026

Financial advisor consulting cross-border worker on pension matters in Lugano office with Lake Lugano view

The Federal Commission on Occupational Welfare is asking for an increase from 1.25% to 1.75%. Decision to the Federal Council. Direct impact for border workers working in Switzerland.

Context

At a glance

LPP Commission requests increase of minimum rate from 1.25% to 1.75%
0.5 percentage point increase on mandatory pension funds
Positive financial markets in 2025 and 2026 the basis for the request
Final decision rests with the Swiss Federal Council

Key facts

What: Increase of minimum interest rate under the second pillar (LPP)
Institution: Federal Commission for Occupational Pensions
Percentages: From 1.25% to 1.75% (increase of 0.5 points)
Period: Positive markets in 2025 and so far in 2026
Final decision: Swiss Federal Council
Commission votes: 10 in favour, 4 against

The Federal Commission for Occupational Pensions (LPP Commission) has recommended to the Federal Council to raise the minimum interest rate on second-pillar assets from 1.25% to 1.75%. An increase of 0.5 percentage points that directly affects the pension savings of every Italian cross-border worker employed in Switzerland.

Legal parameters and market situation

According to the law on occupational pensions, the LPP Commission recalls in a released note, the parameters for this decision are the yield of Confederation bonds and the performance of stocks, bonds and real estate on the financial markets. In 2025 and so far in 2026, the markets have recorded a positive performance, a central element in the Commission's recommendation.

But the assessment did not stop at market data alone. The Commission also considered the overall financial situation of pension institutions, the evolution of wages in the country, inflation trends (rising prices), the actual returns achieved by pension institutions in previous years, the current interest rate policy and the estimated theoretical return of pension funds.

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Operational details

What the increase from 1.25% to 1.75% means for your retirement capital

The minimum interest rate under the LPP is not a variable market return, but a fixed legal guarantee. Every year your employer must credit to your individual retirement account a minimum percentage of interest on all contributions paid and on previously accumulated interest. Until now this minimum was 1.25%. If the Federal Council approves the Commission's recommendation, the new minimum will rise to 1.75%.

On paper, an increase of 0.5 percentage points may seem marginal. But when you calculate the compound effect over long periods—remember that the LPP is built on the logic of long-term accumulation, typically 30–40 years of working career—the difference becomes significant. Every year the new rate applies both to your paid contributions and to the interest already accumulated, creating an exponential growth effect.

A cross-border worker who accumulates capital in the second pillar over three decades will feel this percentage difference in the final capital available at retirement. It is not a huge figure, but it provides greater protection for your future purchasing power.

The role of the LPP Commission and how the decision-making process works

The Federal Commission for Occupational Pensions is not a political body, but an independent technical body. Its task is to formulate annual recommendations based on objective economic indicators: the return on Confederation bonds, the performance of equity markets and real estate markets. It is not a discretionary choice, but an assessment of data.

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Key points

How to monitor the decision of the Federal Council

The ball is now in the hands of the Federal Council. The LPP Commission has made its recommendation, but there is no official public deadline communicated in the source for the final decision. Typically these decisions are made in the autumn months, but you can expect the Federal Council to officially communicate the result via Swiss federal institutional channels.

As a border worker, the concrete steps you can take are:

1. Consult the website of the Secretariat of State for the Economy (SECO), where official communications on occupational pension decisions are published 2. Contact your employer or LPP fund administrator to ask when they will communicate the new rate to employees and how it will be implemented 3. Request the annual statement of your pension fund to verify the interest credited year by year 4. If you are in complex situations (more funds, changes of company, repatriation of funds to Italy), consult a tax advisor specialized in border matters

Tools to calculate the impact on your future income

Use the calcolatore della pensione on our website to concretely estimate how the increase in the minimum interest rate affects your final capital at the time of retirement. Enter your gross annual contribution paid to the LPP, your current age and the number of years

Source: swissinfo.ch

Frequently Asked Questions

When does the new 1.75% rate take effect?: The source does not specify an exact implementation date. The LPP Commission has forwarded the recommendation to the Federal Council, which has yet to formally decide. Once approved, the new rate applies to interest credited to LPP funds beginning with the first credit following the federal decision. Ask your employer or fund manager when they will notify employees of the change.
How does the increase from 1.25% to 1.75% affect my final capital?: Over long periods of accumulation (20-40 years), even modest percentage differences generate significant compound effects. An increase of 0.5 percentage points increases the guaranteed return on your paid contributions and interest already accrued. Use the pension calculator on our site to estimate the specific impact on your situation, entering your annual contribution and the years left in retirement.
Could my employer decide not to apply the new rate?: No. The minimum interest rate is set by the federal law on occupational pensions (LPP) and is binding. Once the Federal Council approves the increase to 1.75%, it becomes mandatory for all regulated pension institutions in Switzerland. However, many funds charge rates above the legal minimum, which is even more advantageous for you.
Is the new rate also valid for frontier workers like me, or only for Swiss workers?: It applies to all workers affiliated with a Swiss LPP, regardless of nationality and place of residence. If you are an Italian border worker enrolled in the pension fund of the Swiss company where you work, the new minimum rate of 1.75% applies to you like any other Swiss employee. The LPP does not discriminate on the basis of work permit (G, B or other).