It is a decision that surprises no one but is still noteworthy. On Wednesday, the Federal Council decided that the minimum interest rate for occupational pensions will remain at 1,25 percent in 2026. This rate determines the minimum interest that must be paid on the retirement assets of insured persons within the mandatory scheme under the Federal Law on Occupational Retirement, Survivors’ and Disability Pension Plans (BVG).

The Federal Council, which must review the rate every two years, bases its decision on the development of returns on federal bonds as well as on the performance of equities, bonds, and real estate.

Neither a Reduction nor an Increase Warranted

According to the government, the financial situation of pension institutions has stabilized at a good level thanks to solid returns over the past two years and slightly positive returns this year. «A reduction in the minimum interest rate is not justified. However, given the currently low yields on federal bonds and the economic, trade, and geopolitical upheavals — along with the related uncertainties — an increase is also not warranted.»

The Federal Commission for Occupational Pensions and the consulted social partners also expressed majority support for maintaining the rate at its current level.