Pension fund

If you work for several employers and don’t achieve the minimum annual salary pursuant to BVG for any single employer, you can insure yourself voluntarily with the occupational benefits institution of one of your employers. If this is not possible, you can insure yourself with the BVG National Substitute Pension Plan Foundation.

The National Substitute Pension Plan is an occupational benefits foundation for all of Switzerland. Pursuant to the BVG, it assumes the following responsibilities:

• Enforced enrollment: Enrollment of employers who fail to comply with the requirement to enroll with an occupational benefits institution
• Company affiliation on request: Companies can join the National Substitute Pension Plan on request
• Enrollment of voluntarily insured persons: e.g. self-employed persons or employees working for multiple employers whose total annual salary exceeds the BVG minimum salary
• In the case of employers that are not affiliated with an occupational benefits institution: Pay BVG benefits for employees thus affected
• For cases where pension coverage is interrupted: Vested benefits for those who do not enroll in a new benefits institution and who fail to inform the former one about maintaining pension coverage within two years.
• Affiliation with unemployment insurance: Manage the mandatory insurance against the risks of death and disability for individuals receiving daily benefits from unemployment insurance.

Pension funds collect contributions with which they finance their benefits. These are paid by employers and employees together. The contribution amounts depend on a number of factors, such as

• the age and gender of the insured
• the type of pension plan
• the pensionable salary.

The pension fund regulations define how contributions are divided between employer and employees. Employer contributions must equal at least the total of those of all employees. The employer deducts the contribution amount directly from the insured employee's salary.

Exemption from contribution payments is an insurance benefit. An insured person who is incapacitated or disabled prior to reaching retirement age is exempt from having to pay contributions once the agreed waiting period ends. The occupational benefits institution will continue to finance the pension at its own expense.

Your BVG age is calculated by subtracting your birth year from the calendar year. Your BVG age can therefore be a year higher than your actual age.

The Federal Law on Occupational Retirement, Survivors' and Disability Pension Plans (BVG) defines the following pension benefits:

Retirement benefits

• Retirement pension
• Retired person's child's pension

Disability benefits

• Disability pension
• Disabled person's child's pension

Surviving dependants' benefits

• Widow's or widower's pension
• Single payment for widows or widowers
• Orphan's pension 

A person is considered to be unfit for work if they can no longer carry out their job or another reasonable working activity or can only work to a limited extent:

• An illness that has been objectively diagnosed by a doctor
• Accident
• Infirmity 

A vested benefits case means you withdraw from your occupational benefits institution before a benefits case occurs (retirement, disability, death). This applies, for example, if you change your employer.

Not everyone has mandatory insurance under an occupational benefits plan. If you are self-employed or work for several employers, you can enroll voluntarily if your combined annual salary exceeds the BVG minimum salary.

Self-employed persons also have the option to enroll with the benefits institution of their professional association or of their employees. Otherwise they have the right to join the National Substitute Pension Plan.

If you withdraw early from an occupational benefits institution, you are entitled to the assets, referred to as vested benefits, that accrued during this time. The pension fund regulations define the vested benefits amount. The Federal Law on Vesting in Pension Plans guarantees a minimum in benefits.

If you temporarily or permanently withdraw from an occupational benefits institution (e.g. if you quit your job, take leave, or go abroad) and are unable to transfer your vested benefits to a new institution, your benefits are paid out. However, they are not at your disposal. They can be paid out in two different ways:

• You can deposit your vested benefits in a vested benefits account with a vested benefits foundation.
• You can use the vested benefits to purchase a vested benefits policy at an insurance institution. 

Early retirement is possible once you reach age 58, provided that the regulations of your occupational benefits institution permit you to do so. Withdrawing from professional life at an even earlier date is possible only

• in connection with an organizational change,
• for jobs (e.g. pilots) where early retirement is mandatory for public safety reasons. 

Flexible retirement is possible between the ages of 58 and 69 for women and the ages of 58 and 70 for men. Here you can reduce your working hours either gradually or all at once, up to the retirement date. The following conditions apply to flexible retirement:

• The regulations provide for flexible retirement.
• You are fully fit for work in respect of your health on the date of the first stage of a reduction. 

An insured person who becomes disabled before reaching retirement age is entitled to a disability pension on expiry of the agreed waiting period. The amount of the disability pension is defined in the occupational benefits plan. You can calculate the minimum BVG disability pension using the same procedure and the same conversion rate as for the retirement pension: Multiply the retirement assets at the retirement date by the conversion rate valid on that date.

Persons who draw a disability pension are also entitled to a disabled person's child's pension for each eligible child. Eligibility applies to children

• up to their 18th birthday,
• up to their 25th birthday if they are in school or training,
• until gainfully employed, but at the most up to their 25th birthday, and if their disability level is 70% or more.

Minimum BVG requirements state that a disabled person's child's pension is 20% of the statutory disability pension.

Permanent or long-term full or partial restriction of a person's ability to work or earn an income.

The restriction in capacity for work expressed as a percentage. The IV determines the applicable level.

When you reach retirement age, you can withdraw 25% of your retirement assets from the mandatory portion of your occupational benefits plan as a lump sum.

If your occupational benefits institution's regulations permit, you can also withdraw all your retirement assets as a single lump sum. To do this, you will need to inform your pension fund before you retire. Your pension fund regulations may specify a notice period.

The following are entitled to receive a child's pension:

• biological and adopted children,
• the insured person's foster children as defined by the AHV/IV,
• stepchildren who receive full or primary financial support at the time of the insured person's death. 

A life partner is a person who

• receives significant financial support from the insured,
• shared the household with the insured person for the last five years without interruption up to their death,
• is responsible for supporting one or more joint children.

Life partners may not be married or related to each other or live in a registered partnership.

Persons who draw a retirement pension are entitled to a retired person's child's pension for each eligible child. Eligibility applies to children

• up to their 18th birthday,
• up to their 25th birthday if they are in school or training,
• up to their 25th birthday if their disability level is 70% or more.

Minimum BVG requirements state that a retired person's child's pension equals 20% of the statutory disability pension.

The personal certificate (which is also known as a pension certificate or pension fund certificate) serves information purposes and contains all the important information about your insured benefits under the occupational benefits program.

A pension refers to regular payments made to an insured person for a fixed period or for life.

The current regular retirement age is 64 for women and 65 for men. You can draw an AHV pension up to two years in advance or defer it by up to five years. As part of the planned 11th revision of the AHV, a higher retirement age as well as a more flexible retirement age are being discussed.

Risk insurance is a type of life insurance that offers financial protection against the risks of death and occupational disability.

Self-employed refers to anyone not working under an employment contract and who the AHV has recognized as being self-employed. Self-employed persons are responsible for managing their own pensions.

A death lump sum is a single payment made to the beneficiaries as defined in the regulations when the insured person dies.

The law prescribes which benefits must be insured and to what extent. However, the employer has the option of providing better insurance for his employees. Benefits that exceed the statutory minimum are therefore extra-mandatory benefits.

The conversion rate is used for calculating the annual retirement pension and comprises a factor for calculating the available retirement capital. The Federal Council sets the minimum conversion rate in accordance with the BVG.

Unpaid leave is treated differently from termination. The employment contract remains in force, only the salary is temporarily suspended. During unpaid leave, persons previously insured under the BVG generally have the option to continue their pension coverage without restrictions, or at minimum to remain insured against the risks of disability and death. Employer and employee share the contribution payments.

By law, occupational benefits insurance does not cover the full salary. An amount referred to as the coordination deduction is deducted from the annual AHV salary, and a threshold applies to the pensionable salary. The coordination deduction applies to the part of the annual AHV salary that is already insured under Pillar 1 (AHV). Your pension plan has more information about the precise salary definition.

A benefits case occurs when a person reaches retirement age, becomes disabled, or dies.

Every occupational benefits institution issues its own regulations that define the scope of its occupational benefits insurance. Pension fund regulations must specify at least the following:

• the range of benefits (e.g. on retirement, disability, death)
• the various groups of insured persons (e.g. employees, managers) 
• the conditions for entitlement (e.g. duty to provide support)
• the various pension plans (BVG plan, plan for managers)
  
• the way that benefits are financed (e.g. annually, quarterly, payments in arrears)

Orphan's pensions are paid when an insured person dies and leaves behind eligible children. Eligibility applies to children

• up to their 18th birthday,
• up to their 25th birthday if they are in school or training,
• until gainfully employed, but at the most up to their 25th birthday, and if their disability level is 70% or more.

Minimum BVG requirements state that an orphan's pension equals 20% of the statutory disability pension.

The waiting period is the time between the date on which a person becomes unable to work and the date on which the disability pension or exemption from premium payments begins.

A widow's or widower's pension is the amount paid to the partner of a married insured person when that person dies.

The home ownership promotion program allows you to withdraw amounts in advance or pledge your retirement assets in order to finance owner-occupied residential property.