AXA Foundation for Supplementary Benefits
Gradual adjustment of conversion rate by 2027
Key points at a glance
- Between 2025 and 2027, the AXA Foundation for Supplementary Benefits will gradually adjust its conversion rate to 4.6% for men and women aged 65. This will minimize the redistribution from people who are still working to pensioners, opening up the prospect of higher interest income for insureds going forward.
- The gradual adjustment over the course of three years means insureds can plan with greater reliability, and it cushions any pension reductions.
- Nothing will change for lump-sum payouts and existing pensions.
What will change?
Gradual adjustment of conversion rate by 2027
From 2025 to 2027, the AXA Foundation for Supplementary Benefits will gradually adjust its conversion rate to 4.6% for men and women aged 65.
The adjustment will take place over a span of three years. This means insureds can plan with greater reliability, and it cushions any pension reductions, especially for people who are about to retire.
The adjustment will not impact lump-sum payouts or existing pensions.
Prospect of higher interest income for insureds
By adjusting the conversion rate, the AXA Foundation for Supplementary Benefits reduces the increasing redistribution so that more of the investment return will be available to pay interest on retirement assets. The present interest model was therefore adjusted with effect from January 1, 2025.
Even an additional half of a percentage point in interest has a significant impact over the long term, as the following example shows:
- CHF 100,000 in starting capital, earning interest at 1.0% a year over 20 years, grows to CHF 122,019
- CHF 100,000 in starting capital, earning interest at 1.5% a year over 20 years, grows to CHF 134,685
- CHF 100,000 in starting capital, earning interest at 1.0% a year over 40 years, grows to CHF 148,886
- CHF 100,000 in starting capital, earning interest at 1.5% a year over 40 years, grows to CHF 181,401
The Board of Trustees is determined to provide a fair distribution of funds for all generations. To this end, it also introduced a pension participation model in 2025. Insureds will benefit from the Foundation's strong performance even after they retire.
Insureds can count on robust supplementary pension provision that offers capital protection and pension options at fair conditions.
Understanding the conversion rate
What is a conversion rate?
The conversion rate is the percentage of the retirement capital you have saved up that is converted into an annual pension when you retire. A conversion rate of 4.6% means that every CHF 100,000 in retirement capital results in a pension of CHF 4,600 a year.
What is meant by conversion losses?
If the conversion rate currently in use is above the correct level from an actuarial (i.e. purely mathematical) point of view, then every time someone retires, the pension fund needs to have more capital in reserve than the assets that person has actually saved in order to fund his or her retirement pension. This is the reason for the ever-increasing redistribution from working insureds to pensioners. The difference between the assets accumulated and the capital actually needed is referred to as a conversion loss.
How are future retirement pensions calculated?
Each individual’s future pension is different and depends on a range of factors, including how much retirement capital they have saved while working.
As a rule of thumb, retirement assets x conversion rate = annual pension.
You can simulate your future pension in the myAXA pensions portal at any time.
I will be retiring soon and plan to draw a pension. How does this change affect me?
Retiring in the transitional years between 2025 and 2026
The following conversion rates apply to the extra-mandatory retirement assets if you retire at age 65 in a transitional year:
The conversion rate of the previous year applies if you retire on January 1.
Retirement from 2027 onwards
A standard conversion rate of 4.6% will apply to all men and women retiring at age 65 starting in 2027.
Individual adjustment of retirement/partner pension
Insureds will be able to adapt the amount of retirement and partner pensions in line with their individual circumstances. They can increase their retirement pension – in which case the insured partner pension will be lower in the event of death. Conversely, they can increase the partner pension in the event of death – in which case their own retirement pension will be commensurately lower. Insureds can specify their preferred option when they register for retirement. No action is required before then.
Frequently asked questions on the change in the conversion rate
I am planning to have my pension paid out as a lump sum. How does this change affect me?
The adjustment of the conversion rate has no effect on lump-sum payouts.
I am already drawing a retirement pension. Will anything change for me?
No, nothing will change for you. The adjustment of the conversion rate has no effect on existing retirement, survivors or disability pensions.
Where can I find details of my pension fund and my retirement assets?
The pensions portal on myAXA lets you view your current retirement assets at any time and learn more about your retirement provision. You can also find your latest pension fund certificate in the portal.
How can the conversion rate be lower than the statutory minimum of 6.8%?
The statutory minimum conversion rate, currently set at 6.8%, applies to the mandatory portion of occupational benefits, i.e. the minimum according to the BVG/OPA. The AXA Foundation for Supplementary Benefits deals solely with the extra-mandatory portion. Pension funds are free to set their own conversion rate for the extra-mandatory portion.
What can I do to increase my future pension?
You can increase your personal retirement assets through voluntary buy-ins in the pension fund, provided you have not already reached the maximum buy-in amount. You should check beforehand how a voluntary buy-in will affect both your future pension and your tax situation. You can also save additional capital for your retirement in the third pillar.
For more information and frequently asked questions on the change in the conversion rate, please consult the Q&A as well as the additional documents.
