BVG/LPP, A 2ND PILLAR THAT ATTRACTS TALENT.
Occupational pension provision (BVG/LPP), or the 2nd pillar, allows your employees to build up capital for their retirement while protecting them financially in the event of disability or death. Mandatory for employees who meet the legal requirements, it can be enhanced with extra-mandatory benefits.
A BVG/LPP PLAN TAILORED TO YOUR BUSINESS AND YOUR EMPLOYEES
From the legal minimum to extended pension plans, discover the main components of the 2nd pillar in Switzerland and the optimisation options for your business.
RETIREMENT & BASIC PROTECTION
Mandatory BVG/LPP cover
Mandatory BVG/LPP cover guarantees employees who meet the membership requirements retirement savings and minimum benefits in the event of disability or death. It forms the basis of occupational pension provision in Switzerland.
ENHANCED BENEFITS
Extra-mandatory BVG/LPP cover
Extra-mandatory cover makes it possible to insure additional portions of salary, increase savings contributions and enhance benefits. A real asset for retaining your employees and attracting new talent.
PENSIONS & FINANCIAL SECURITY
Disability and death cover
In the event of disability or death, the pension fund provides benefits for insured persons and their families, in accordance with the pension fund regulations. Cover can be adjusted to offer protection above the legal minimum.
CONTRIBUTIONS & RETURNS
Choosing a pension fund
Collective foundation, full insurance model or semi-autonomous solution: each pension fund differs in terms of costs, potential returns and risks. Comparing BVG/LPP solutions helps you find the right balance for your business.
DOES YOUR PENSION FUND OFFER THE BEST TERMS?
Mandatory membership, contributions, extra-mandatory cover, conversion rates and changing pension fund: answers to the key questions Swiss employers ask.
ALL ABOUT BVG/LPP AND PENSION FUNDS IN SWITZERLAND
When does BVG/LPP become mandatory for an employee in Switzerland?
Membership of an occupational pension scheme is mandatory for employees who meet the legal requirements, particularly in terms of age, annual salary and length of the employment contract. Death and disability cover starts on 1 January following the employee's 17th birthday, while retirement savings start on 1 January following their 24th birthday.
What is the difference between mandatory and extra-mandatory BVG/LPP?
Mandatory BVG/LPP guarantees the minimum benefits required by law on the portion of salary subject to mandatory pension provision. Extra-mandatory BVG/LPP goes beyond these requirements, for example by insuring a larger portion of salary or providing higher savings contributions and risk benefits.
Who pays BVG/LPP contributions: the employer or the employee?
Occupational pension contributions are funded jointly by the employer and the employees. The law requires the employer to cover at least half of the total contributions set out in the pension fund regulations. Some companies choose to pay a higher employer share in order to offer their employees better terms.
How does the BVG/LPP conversion rate work at retirement?
The conversion rate turns the accumulated pension capital into an annual retirement pension. The statutory rate is 6.8% for retirement assets under mandatory BVG/LPP at the reference age. For the extra-mandatory portion, pension funds may apply different rates, depending on their regulations.
Can a company change pension fund to reduce its costs?
Yes. A company can change pension fund to look for better terms in contributions, fees and benefits. However, the change must respect contractual notice periods, termination rules and staff consultation procedures. Comparing BVG/LPP foundations helps you assess the advantages and consequences of a transfer.
What happens to my 2nd pillar when I leave my job?
When employees leave their company, their accumulated BVG/LPP assets must be transferred to their new employer's pension fund. If they do not start a new job straight away, the capital can be placed in a vested benefits account or policy to preserve their retirement savings until they join a new scheme.