Pension Plan Innovation

The first way to innovate with the Loi fédérale sur la prévoyance professionnelle vieillesse, survivants et invalidité [Federal Law on occupational pension, survivors’ and disability schemes (LPP)]) is to take action on pension financing. Traditionally, there are two kinds of pension plan: 

There is a third way, called the "mixed" or "bi-primacy" plan, which tries to reconcile the best features of the aforesaid two schemes by combining their characteristics. It guarantees a minimum amount of annuity determines the amount of the contribution. This mixed plan is set up with the pension fund, your insurance broker and the company, according to the needs of employees, taking into account several factors such as financial stability, risk, and expectations in terms of pension annuities.

Setting up a proper LPP policy that contributes to performance requires a grasp of the company’s position in the corporate benefits landscape. Qualibroker-Swiss Risk & Care has developed comprehensive sector benchmarks, in particular in the field of occupational pension plans. These benchmarks are based on meticulous analysis of data from its many clients. They provide a fair reflection of the market. They thereby enable companies to align themselves with the standards of their sector, or even to exceed them as part of a more aggressive HR policy. As brokers, we rely on these benchmarks to provide informed and documented advice, while taking into account the company's HR strategy and desired financial effort.   

Partial retirement under the first pillar is now possible and governed by a set of specific conditions with the entry into force of the Association Vieillesse et survivants [Old age and survivors’ insurance (AVS)] reform on 1st January 2024. The age of retirement is now flexible, ranging from 63 to 70, while the reference age is set at 65 for both men and women. With most pension schemes, annuities may be paid out between the ages of 58 and 70. They must offer the option of a gradual transition to retirement in at least three stages. In principle, the first stage should involve a reduction in activity and salary of at least 20%. If the pension scheme provides for the payment of a lump sum in lieu of a retirement pension, the lump sum may also be paid in stages not, however, exceeding three instalments. In certain circumstances, such staggering of benefits over time can reduce and spread the tax burden on the second-pillar benefits  .

In the case of early retirement, the employer can finance an AVS bridging pension up to the AVS reference age. Its financing is treated as a deductible loss   for tax purposes. The conditions for granting this benefit, the choice of the pension scheme that will guarantee it etc. require particular attention, not least because of the statutory provisions specific to this type of benefit. 

In addition to the undeniable benefit to employees, who thereby enjoy a smooth transition to retirement, this mechanism also offers significant advantages to employers. Faced with the massive retirement of the "baby boomers", this measure will help mitigate the impact on companies and enable future recruitment needs to be anticipated. It constitutes a real corporate benefit, in particular for the recognition of the most committed and loyal employees, or for specific categories such as members of management team. It has a potentially favourable tax implications for both the company and the relevant employee. In certain sectors, it is a vector for introducing equality and attractiveness. This is the case, for example, in the secondary sector, where a collective agreement sets an advanced retirement age for companies competing on the employment market. 

Our occupational pension scheme advisors are available and ready to work with you to find solutions that will make your company more attractive without increasing the cost burden. 

The many advantages of mixed plans