Swiss Replacement Rate Index
6 October 2026
Net replacement rate
For AVS and LPP, the Swiss system targets at least 60% of final salary. That is what the net replacement rate measures: what percentage of our net income will we keep at retirement? Calculate yours, by canton.
Why talk about retirement with a Bratwurst?
Because Swiss pension planning is too serious to discuss only with acronyms. Picture this: the day before retirement, your salary earns you a Bratwurst on the way out of the office. The next day, your first day of retirement: you have 44.94 % of a Bratwurst left on your plate. The other 55.06 %, is what your standard of living lost overnight.
And the sausage keeps shrinking. LAMal premiums climb 3.5% per year, your pension remains frozen. In ten years, the same pension buys only 32 %. Twenty years later, you are eating the memory of a Bratwurst.
The Pension Bratwurst Index measures exactly that: how much of your working income remains once you retire. Today the Swiss average is 44.94 %. We publish this number every day, by canton, freely. Because it is better to see it coming at 40 than to discover it at 65.
Friday
Last working day
Monday
First day of retirement
Why this index?
This index seeks to measure the performance of the retirement system, integrating factors such as pension fund performance and health costs. The figure presented is the average across all cantons and represents the theoretical situation of a median individual. Without career interruption, with stable salary growth.
The index integrates social contributions, income tax (with bracket creep compensation), LAMal premiums by canton, LPP capital accumulation, and the AVS pension according to scale 44.
The net replacement rate measures the ratio between the first net income at retirement and the last net income during working life. A rate below 70% signals a risk of significant reduction in living standards.
Index positioning
Against reference zones (Constitution: 60%, Swisscanto target: 70%)
Replacement rate vs. conversion rate
The net replacement rate is the ratio between your first net income at retirement and your last net income during working life. It is the most direct measure of what really changes in your daily life when you stop working. It integrates the mandatory elements: AVS, LPP, cantonal taxation, LAMal premiums.
The conversion rate is a technical parameter of the 2nd pillar: the percentage of accumulated LPP capital that converts into an annual pension (6.8% for the mandatory portion, but on average around 5% in umbrella funds, where the extra-mandatory portion applies a lower rate). This is the rate debated at every referendum. But it is only one lever among many.
The public debate revolves around the conversion rate, a technical parameter that tells only part of the story. We measure the whole plate: how much Bratwurst you have left once you count AVS, LPP, taxes and LAMal premiums. The two indicators do not say the same thing. And it is ours that answers the only question that truly matters: will you still have enough to eat?
And the Constitution?
Article 113 of the Swiss Constitution requires that AVS and LPP, combined, allow the insured to « maintain their previous standard of living in an appropriate manner ». The operational objective derived from this obligation, often called the « the benefit target » of Swiss pension system, aims for a replacement rate of at least 60% of final salary from the mandatory AVS and LPP. This target appears in the LPP preparatory works and is recognised by all sector actors - ASIP, FSIO.
The Pension Bratwurst Index covers exactly this perimeter, measured after taxes and LAMal premiums. The result today: 44.94 %. Far, very far, from the recognised operational threshold.
Purchasing power erosion
The fall does not stop on the first day of retirement. Health insurance premiums grow at 3.5% per year on average, twice as fast as AVS pension indexation. Result: every year, the same pension buys a little less.
Over twenty years, a replacement rate of 44.94 % shrinks to 23 % in real purchasing power. It is no longer a Bratwurst - it is the memory of a Bratwurst.
Simulation with LAMal premium growth at 3.5%/year, pensions indexed according to AVS mixed index.
Income disparities
Replacement rate by salary percentile (P10 to P90)
LAMal cost growth by canton
Annual variation of gross benefits per insured - 8-quarter rolling average (source: FOPH). Red = high cost growth, green = stabilisation or decline.
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