Understanding the BVG second pillar certificate

The BVG certificate is one of the main documents of the Swiss pension system but, often, it is simply filed without paying due attention to it.
In this article we are going to explain the main items, also because, in order to make a customized third pillar, it is essential to know your first and second pillar benefits.

The pension certificate comes to you each year in late January and early February, detailing your expected benefits for the current year.
Like the first pillar, the second pillar covers the three main risks, retirement, disability and death.
For each of these risks there will be benefits, which may be the minimum benefits required by law, or your employer may have chosen a pension plan with higher benefits.
Understanding the pension plan under which you are insured is crucial, even, for example, in case you are about to change jobs, so you can compare benefits between your old and new employer.
Now let's look at the main items:

On this item you will find two entries, the "declared or notified salary" and the "insured salary."
The declared salary corresponds to the salary notified to the OASI and should be your actual gross salary.
The insured salary, on the other hand, is the salary by which all the benefits in the certificate are calculated. You will notice that the insured salary is lower than the notified salary, this is due to the "coordination deduction" applied so as not to insure twice the same portion of the salary that is already insured by the first pillar.
Please note: some companies insure the entire salary (without coordination deduction) in order to give their employees higher benefits.

The BVG or second pillar, works on a capitalization system, so the accumulated capital is yours.
The retirement savings therefore, is the amount you have accumulated as of the date the certificate is issued, and includes your contributions, those of your employer and any free passes you have brought from your previous employer.
Interest is charged on your assets, which you will always find on the certificate.

This item tells you how much your retirement pension will be, and the corresponding lump sum.
That's right, because the second pillar allows you to choose, at retirement, whether to take an annuity, or withdraw the capital.
Basically, during your working life you will make contributions that will create a lump sum, which at retirement will be converted into an annuity for life through a "conversion rate," which is a percentage by which the lump sum is converted into an annuity.
An important fact: You will find two columns indicating the retirement capital, one labeled "According to BVG" or "Mandatory Part," the second column "Total." 
The "According to BVG or Mandatory Part" column shows you how much you should accumulate according to the legal minimum, while the "Total" shows you how much you should really accumulate.
This gives you two facts: The first is that if the Total column is higher than the According to BVG column, it means that your plan is higher than the legal minimum, which is good. The second data point, on the other hand, is that if you decide to move to an EU country, you will not be able to withdraw the According to BVG part early. In this case you will only be able to withdraw the super-obligatory part, that is, the difference between the Total and According to BVG.

Please note: The lump sum you will have at retirement is a projection and may change whenever interest rates and conversion rates are changed.

In case of disability "as a result of illness," you will receive the pension specified in the certificate after the waiting period until retirement.
In addition to this pension, if you have children who are minors (or up to age 25 if they are studying), you will also receive a disability child's pension.
Please note: the full annuity will be paid with a 70% disability, otherwise it will be a partial annuity.
In addition to these annuities, there is "contribution waiver" coverage. This coverage, also found in the third insurance pillar, means that in case of disability the company will take over your contributions until you retire. In this way you will arrive at retirement with all the retirement capital provided.

In the event of death "before retirement," your spouse or partner will receive the specified annuity, or can apply for a lump sum settlement.
Please note, it is not enough simply to be married to be eligible for this annuity. For this point we refer to the appropriate article.
In addition to this annuity, and as happens with disability, your children are also entitled to an orphan's annuity up to age 18 or age 25 if they are studying.
Some companies may provide, in addition to the statutory benefits, an additional lump sum death benefit. This is generally x times the annual salary.

This is the ability to make additional payments to the second pillar to fill any gaps and have higher benefits, as you will go on to have a higher final lump sum.
These payments are tax-deductible, but you can only make the payments if you have not made any early withdrawals (or returned them).