Summary
The Federal Council sent a legislative amendment on 28 January 2026 to the consultation process for extending the interest-free investment of vested benefits funds with the Federal Treasury. The BVG Substitute Institution should be permitted to invest a maximum of 10 billion francs interest-free with the federal government when the Swiss National Bank (SNB) policy rate is at 0% or lower – but only if its coverage ratio falls below 103 percent. The regulation is to be limited to 6 years. The consultation period runs until 30 March 2026.
Persons & Institutions
- Federal Council
- BVG Substitute Institution
- Swiss National Bank (SNB)
- Social Partners
Topics
- Occupational Pensions (BVG)
- Vested Benefits
- Low Interest Rate Environment
- Financial Stability
- Legislation
Detailed Summary
The BVG Substitute Institution is a foundation supported by the social partners with the task of accepting vested benefits funds. These come from individuals who change employment and are temporarily not insured in a pension institution. The substitute institution must guarantee the nominal value of these funds and invests them in financial markets.
Already in September 2020, Parliament granted the substitute institution the limited right to invest funds with the federal government under certain conditions in a negative interest rate environment. This regulation was extended once and expires in September 2027. Since interest rates are low again and federal bonds partly show negative returns, the regulation is to be renewed.
The planned new regulation provides that the substitute institution can deposit up to 10 billion francs interest-free with the Federal Treasury when the SNB policy rate is at 0% or below. This option is subject to a condition: the substitute institution's coverage ratio must fall below 103 percent. The new regulation is limited to 6 years.
The substitute institution already used this option from May 2022 to March 2023. The risk-free investment with the Federal Treasury enables it to avoid underfunding and fulfill its guarantee obligations even with high fluctuations in financial markets.
Key Messages
- The interest-free investment of vested benefits funds with the Federal Treasury will expire in September 2027 and is to be extended
- A maximum of 10 billion francs can be invested interest-free, but only if the coverage ratio is below 103%
- The new regulation is limited to 6 years and tied to an SNB policy rate of 0% or lower
- Consultation period runs from 29 January to 30 March 2026
- This measure protects the guarantee obligations of the substitute institution during volatile market phases
Stakeholders & Affected Parties
| Stakeholder | Impact |
|---|---|
| BVG Substitute Institution | Beneficiary: Obtains safety mechanism to prevent underfunding |
| Vested Benefits Creditors | Beneficiary: Better security of their funds guaranteed |
| Social Partners | Neutral: Support the substitute institution |
| Federal Treasury | Neutral to positive: Manages additional funds, but bears interest loss risk |
| Financial Market Actors | Neutral: Reduced demand for risky investments |
Opportunities & Risks
| Opportunities | Risks |
|---|---|
| Stabilization of pension security | ⚠️ Interest losses for the Federal Treasury |
| Prevention of underfunding | Continued dependence on interest rate environment |
| Protection of vested benefits | Long-term solution for low interest rate phase unclear |
| Proven measure (already used in 2022/23) | Limited capacity (10 billion francs) |
Relevance for Action
For Decision-Makers:
- Monitor consultation process (until 30 March 2026): Analyze statements from social partners, employer associations and trade unions
- Develop longer-term strategy: The 6-year limitation is temporary – a structural solution for persistent low interest rates is required
- Clarify risk distribution: Balance between security of vested benefits and interest loss risks for the federal government
- Review coverage ratio thresholds: The 103% threshold should be regularly checked for appropriateness
Quality Assurance & Fact-Checking
- [x] Central statements and figures verified (Official source: news.admin.ch)
- [x] Data and deadlines correctly recorded (Consultation: 29.01.–30.03.2026)
- [x] Institutional roles correctly represented
- [ ] ⚠️ Long-term impacts on federal budget not quantified
Additional Research
Recommended Sources for Further Study:
- Federal Office of Social Insurance (BSV) – Official information on BVG legislation and substitute institution
- Swiss National Bank (SNB) – Current policy rate developments and monetary policy
- Pension Reports – Statistics on vested benefits and coverage ratios
Sources
Primary Source:
Federal Council Press Release – Interest-Free Investment of Vested Benefits Funds by the BVG Substitute Institution (28 January 2026)
https://www.news.admin.ch/de/newnsb/T93j5S70GSvPvBLSZ3jDR
Accompanying Documents:
- Changes BVG Interest-Free Investments (PDF, 99.08 kB)
- Explanatory Report BVG Interest-Free Investments (PDF, 301.56 kB)
- Consultation Addressees LPP Interest-Free Investments (PDF, 210.65 kB)
Verification Status: ✓ Facts checked on 28 January 2026 (Official source)
This text was created with the support of Claude.
Editorial responsibility: clarus.news | Fact-checking: 28.01.2026