Between legal obligations and choices in occupational benefit planning
As an employer, you are subject to the Federal Law on Occupational Retirement, Survivors’ and Disability Benefit Plans (LPP) and must therefore be affiliated to a pension fund (LLP Art. 11.1). In contrast to the OASI (AVS), for which contributions and funding are determined by statute, the LPP leaves you wide discretion as long as the minimum benefits for insured employees are provided. Optional supplementary benefits, called “super-mandatory”, may be paid to all employees or to a defined group. This decision-making stage concerns benefits and will be reached only at the end of the process of selecting your occupational benefit solution.
The first choice you have to make as an employer is to determine the type of pension institution you wish to join. A collective foundation, common fund of an industry association or own foundation? Where the sector is not an issue that needs to be taken into consideration, the size of the workforce is the criterion to be used. Large companies thus tend to set up their own pension funds, while VSEs opt for a collective foundation that enables them to pool risks and outsource all technical decisions.
With the new solutions, however, opting for autonomy, i.e. opting for an own pension fund, is not a prerogative of companies with hundreds of employees. “Within a defined framework, around 20 is enough, says Yvan Roux, Director of the Corporate Business Unit of Swiss Risk & Care. The lack of knowledge and technical skills, particularly in the area of investment, is what hinders SMEs. This is clearly no longer the case with our new offer: OpsionProtect.”
The best of two models
Swiss Risk & Care has negotiated an exclusive agreement with the Opsion Foundation
combining autonomy and security: the creation of your pension fund in the Opsion world and its management applying the same strategies as a Common Fund for a maximum of three years.
Opsion usually offers two pension fund models depending on the level of autonomy sought: the Common Fund for complete outsourcing of management or the Pension Fund, which offers a tailor-made framework on which to build your own occupational benefit solution.
“OpsionProtect was developed by Swiss Risk & Care. The purpose is to offer a product that combines the best of both these systems: the advantages of autonomy and the benefits of outsourcing decisions to professionals. We now allow a company to create a pension fund for its staff, guaranteeing its secure management, but with the assurance of being able to transfer its staff back to the Opsion Common Fund should the aforementioned model not meet its expectations.”
The advantages of OpsionProtect
Your company will benefit from increased security for three years while at the same time training the Pensions Commission on how to manage the pension fund. Legal liability as well as strategic decisions are externalised to professionals who regularly explain the choices made in order to contribute to training the members of the Pension Commission.
The autonomy model allows you to use occupational benefits as a differentiating tool for employee retention and, if necessary, to distance yourself from political
debates aimed at lowering pensions.
As soon as you feel that you have sufficient understanding of the matter, or if you wish to change certain parameters (e.g. the conversion rate, interest on savings or choice of investments), you can take back control of your pension fund.
Making of the right choice for your occupational pension plan
“Thanks to OpsionProtect, the founding company will make an informed decision by the end of the third year at the latest as to whether or not to continue on the path to autonomy, Yvan Roux explained. If it is satisfied with the autonomy model, the company will take control of strategic decisions and will benefit from advantageous management costs and risk premiums thanks to the economies of scale offered by Opsion. Regulation, governance, relationships with external service providers and administrative management will remain outsourced. If, for various reasons, independent management is not considered suitable, it may transfer its occupational benefits plan to the Opsion Common Fund and enjoy the advantages of risk pooling and total outsourcing of decision-making.”
So why not try it?