# Federal Council passes law to reform private pension schemes

Source: https://www.mtrlegal.com/en/federal-council-passes-law-on-private-pension-reform/ · Language: en · Updated: 2026-07-27

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## Approval of the Federal Council on the Pension Reform Act

The Federal Council has approved the Pension Reform Act. This legislative step has been completed to restructure the framework conditions for private capital-funded pensions as well as occupational pensions and to implement the necessary adjustments. The significant changes are those specified in the law, particularly related to the state-supported retirement provisions.

## Goal of the Reform for Private Retirement Provision

### Reorganization of Subsidized Pension Provisions

At the heart of the new regulations is the state-supported private pension. The Pension Reform Act sets guidelines regarding the design of subsidy mechanisms and their practical handling. This rewrites the legal framework for corresponding pension contracts and the associated benefits.

### Adjustments in Occupational Pensions

In addition to private pensions, the law also considers aspects of occupational pensions. The reform covers regulatory areas that concern the implementation and further development of corresponding models and are particularly important in practice for employers and employees.

## Classification from the Perspective of Companies and Private Investors

### Legal Framework and Market Reference

With the approval of the Federal Council, the reform is integrated into the legal framework that is significant for providers, mediation structures, and contract practices. The changes thus affect not only the direct funding requirements but also the legal embedding of products aimed at capital-funded retirement provision.

### Impact on Contract and Tax Reference

As far as state funding, contribution, and payout structures, as well as the classification in tax regulatory systems are concerned, the new regulation can have consequential effects on contract design and tax treatment. The specific consequences depend on the exact contract structure and the individually relevant conditions.

## Outlook and Advisory Needs

The approval of the Pension Reform Act creates a binding foundation for further application of the new regulations in practice. Where private pensions, occupational pension models, and tax implications intersect, the question often arises regarding the correct legal classification and implementation in the respective case. If clarification is needed, professional guidance in tax law by MTR Legal within a **[Legal Advice in Tax Law](https://www.mtrlegal.com/cities/muenster/steuerrecht/)** could be considered.