As stipulated in the AHV law, the Federal Council reviews, as a rule every two years, the need to adjust AHV and IV pensions in line with wage and price trends. The Federal Council bases its decision on the arithmetic mean of the wage index and the price index (mixed index), and takes into account the recommendation of the Federal AHV/IV Commission. The Federal Council last adjusted pensions in 2023. At that time, it set the minimum AHV/IV pension at CHF 1,225.
Costs of pension adjustments
The increase in pensions will generate additional expenditure of around CHF 1672 million. The AHV will bear these costs to the tune of CHF 1487 million, of which CHF 300 million will be borne by the Confederation (which finances 20.2% of AHV expenditure). The IV will incur additional expenditure of CHF 185 million. The Confederation will not have to bear any additional costs here, as its contribution to IV is no longer calculated as a percentage of expenditure.
Adjustment of occupational pension limits
This adjustment also has an impact on mandatory occupational benefits. The amount of the coordination deduction for compulsory occupational benefits will rise from CHF 25,725 to CHF 26,460, and the entry threshold from CHF 22,050 to CHF 22,680. The maximum tax deduction for tied personal pension plans (pillar 3a) will rise from CHF 7,056 to CHF 7,258 for those with a 2nd pillar, and from CHF 35,280 to CHF 36,288 for those without. These adjustments will also come into force on January 1, 2025.
Adjustments to supplementary and transitional benefits
The annual amounts of supplementary and transitional benefits, intended to cover basic needs, will rise from CHF 20,100 to CHF 20,670 for single people and from CHF 30,150 to CHF 31,005 for couples. They will also rise to 10,815 francs for children over 11 and 7,590 francs for children under 11. The adjustment of AHV and IV supplementary benefits and transitional benefits will entail additional expenditure of around CHF 11 million for the Confederation and CHF 6 million for the cantons.
The maximum rents taken into account for PC and transitional benefits are adjusted for inflation on the basis of certain positions in the national consumer price index for housing and energy. Since June 2022, the last month taken into account for the 2023 adjustment, the increase has been 7.3%. The maximum annual amounts will now be CHF 18,900 in major urban centers (region 1), CHF 18,300 in towns (region 2) and CHF 16,680 in rural areas (region 3). The flat rate for ancillary expenses and heating costs will also be adjusted, rising from CHF 3060 to CHF 3480 per year. The cost of these increases will be CHF 35 million, of which CHF 22 million will be borne by the Confederation and CHF 13 million by the cantons.
Deductibles on earned income have been adjusted in line with wage trends since the last adjustment based on the wage index. The deductible for single people has been raised from CHF 1,000 to CHF 1,300 per year, and for couples and people with children from CHF 1,500 to CHF 1,950 per year. This adjustment will cost CHF 11 million, of which CHF 7 million will be borne by the Confederation and CHF 4 million by the cantons.
Source: Federal Social Insurance Office (FSIO)
All these developments will have an impact on the key figures for the pension business; here is a summary for the year 2025.
