Choosing the right 2nd pillar
Faced with the multitude of offers available from pension funds, the legal obligation to affiliate employees to a provident institution is a challenge for any employer. As an independent broker, Swiss Risk & Care can guide you through the complex world of occupational pensions.
The Swiss pension system is based on 3 pillars:
- State pensions
- Occupational pensions
- Private pensions
The second pillar aims to enable the elderly, survivors and invalids to maintain their previous standards of living. It supplements the 1st pillar (AVS or Al). The addition of the two annuities should make it possible to reach approximately 60% of the last salary.
Entering into force in 1985, the Federal Law on Occupational Retirement, Survivors and Disability (LPP) provides that “any employer with employees subject to compulsory insurance must be affiliated to a provident institution [...]” (LPP, art. 11.1). The law defines the minimum benefits for insured parties and creates more generous solutions. These are called extra-mandatory benefits. Unlike AVS and LAA, the contributions and funding for which are set out by law, the LPP leaves the employer with a considerable freedom of choice.
Choose your pension fund and pension plans
“In general, employers must decide whether to join a collective foundation, a common fund of a sectoral association, or to maintain their own foundation, says Jean-François André, LPP Brokerage Director at Swiss Risk & Care. Once that first choice is made, there are three types of provident institution available, depending on the stakeholder who bears the risks: the foundation itself (independent foundation), the insurance company (foundation with full reinsurance), the foundation and the insurance (semi-autonomous foundation). The premiums and benefits will essentially determine this choice. Lastly, the employer must design their pension plan(s), a true reflection of their social policy.”
The Provident Commission, made up of equal numbers of employer and employee representatives, will then approve the choices.
Support by your professional pension broker
Faced with the number of solutions offered by the occupational pensions sector, we are committed to providing you with independent advice.
“Our knowledge of the market enables us to find the ideal solution to meet your social position and your requirements in terms of costs and services”, explains Jean-François André.
When substantial savings can be made, they are often reinvested in pension plans that improve benefits. This social gesture in favour of employees makes it possible to encourage savings to compensate for the drop in the conversion rate.”
To consolidate the pension plans of the insured party, it is also possible to set up plans chosen by employees wishing to increase their personal contributions, without financial contributions from the employer. “Providing this opportunity demonstrates the employer’s willingness to improve benefits. Their image is improved”, says Jean-François André.
In addition to guiding you in your choice of Institution and pension plan, Swiss Risk & Care can support you on a daily basis in the day-to-day management of your contract: processing entries and transfers, information for employees, coordination with the HR team and the Payroll service provider, support in the event of long-term absences, coordination with other social insurances, etc. The LPP experts at Swiss Risk & Care can assist you at all stages to simplify your decision-making processes and the management
of your occupational pensions.