One reason people often give for not drawing a pension is the fear that in the event of early death after retirement, the saved capital will be forfeited and the surviving dependants will no longer benefit from it. This is precisely where the new pension protection from the Swisscanto Flex Collective Foundation comes in.
How the pension protection works
The new pension protection offers additional assurance for surviving dependants. Until now, spouses received 60%1 of the monthly pension in the event of the death of a pension recipient. With pension protection, the fund will additionally make a one-off payment of 40% of the outstanding pension. The benefit will be paid to the beneficiaries in accordance with the regulations. The monthly pension payment of 60% will continue as usual. For unmarried people, their surviving dependants receive the unused portion of the pension as a one-off lump-sum benefit in accordance with the beneficiary arrangement set out in the regulations.
These changes are designed to make it easier for future pensioners to choose the optimal pension solution.
Same conversion rate for women and men
At the same time, the conversion rate for men at the ordinary retirement age of 65 is increasing from 5.1% to 5.25%. Women already enjoy a conversion rate of 5.25% at this age. This means that starting from 1 January 2026, the same rates will apply to men and women of the same age. This leads to slightly higher new retirement pensions for men and ensures more equal treatment.
Pension protection example: married person
A married man retires at 65. His retirement capital at the time of retirement is CHF 500,000. His annual retirement pension amounts to CHF 26,250 (500,000 x conversion rate of 5.25% = 26,250). He dies at the age of 68. Under the new rules, his wife receives 60% of the annual retirement pension (CHF 15,750) for the rest of her life. She also receives a one-off payment of the remaining 40% for the remaining seven years of the pension protection period (40% of 7 x 26,250 = CHF 73,500).
Pension protection example: unmarried person
An unmarried woman retires at 65. Her retirement capital is CHF 500,000 and her annual retirement pension is CHF 26,250. She dies at 72. The unused portion of the pension for the outstanding three years is paid to the surviving dependants as a one-off lump sum in accordance with the beneficiary arrangement set out in the regulations. In this case, it’s CHF 78,750 (3 x 26,250).
A simple, secure pension solution
The changes are designed to be simple. Pension protection is automatically included with every old-age pension and beneficiaries don’t have to make additional choices or accept a lower pension. And it’s all financed by the foundation, with no extra cost to the insured persons. At the same time, they still get to choose between pension, lump-sum withdrawal or a combination of the two.
The aim of these changes is to provide better protection for people who may not have access to individual financial advice. Drawing a pension becomes more attractive and the choice between pension and lump sum is easier – which all adds up to a dependable, lifelong retirement scheme.
Legal notice: The figures shown are purely illustrative and serve as examples. In the event of a claim, benefits are recalculated in accordance with the regulations and in reference to current basic data. This means there is no legal entitlement to the pension benefits set out above.
1 A surviving spouse of an old-age pension recipient whose spouse’s pension amounts to a different percentage of the old-age pension will continue to receive their spouse’s pension and will be given a one-off payment equal to the difference in the outstanding pensions.
Questions and answers (Q & A)
Yes, the pension protection applies to existing retirement pensions, provided that less than ten years have elapsed since the pension began and the retiree is under the age of 75. Early retirees are also covered for ten years from the start of their individual pension.
No, pension protection is automatically included starting from 1 January 2026, with no reduction in your pension.
Starting from 1 January 2026, the increased conversion rate applies to men who retire at the ordinary age of 65. Nothing changes for women, as they are already on this rate. The new conversion rate has no effect on existing pensions.
Pension protection only applies to the pension portion. If you draw your entire savings as a lump sum, you are not entitled to pension protection benefits.
No, the changes only affect old-age pensions. Other pensions remain unchanged.
We want to provide better protection in the event of early death after retirement, ensure equal treatment of men and women, and make drawing a pension a more attractive option than drawing a lump sum.