Employees and pensions

Financial education of employees: advantages and options at a glance

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Your employees’ financial worries can negatively affect their work performance. As a manager, you can actively counteract this through training and awareness-raising of financial issues, as well as improve productivity and loyalty.

Promoting financial education: we offer you an overview of the options. You will also find out what the advantages are for employees and companies.

Why does financial stress affect work performance?

Economic crisis, wars, inflation – due to various challenges, companies are forced to introduce price increases and staff cuts. According to a study by PwC , these measures cause stress for 60 percent of employees. Especially from a financial perspective. 

For example, every second person earning the equivalent of CHF 91,000 or more per year is worried that they will no longer be able to cover the rising costs. Fear of debt impacts sleep behavior, mental health and self-confidence. This also affects work performance.

The AXA Pensions Study 2023 also shows that there are some large gaps in knowledge and pension provision in the population. The importance of your personal pension situation is often underestimated and discussed with experts too late. 

Takeaway: employees who are financially stressed are often distracted at work, less committed and more likely to look for a new job. Financial stress can also lead to absence due to sickness and mental health problems. Better financial education can help here. 

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Why is financial education important for employees?

Employees knowing how to influence and plan their personal financial situation has a positive impact. As an employer, you can use this knowledge by systematically improving the financial education of your employees as a corporate initiative. This has advantages both for your employees' personal situations and for you as an employer:

  • It strengthens employees’ sense of security and self-confidence.
  • It promotes equal opportunities, as all employees have the same opportunities to learn and apply financial skills.
  • It improves work productivity and loyalty to employers.

Financial education as part of human resources development

The financial education of employees leads to less stress and fewer absences, which in turn brings many benefits for both employers and employees. Strengthening financial literacy is therefore a valuable tool for the development of your staff. Offer support to your professionals in planning their finances as part of their professional development. Investing in general financial education is a promising investment for companies.

How can companies educate their employees in financial matters?

Coaching, workshops, webinars, online tools or employee events on financial and pension issues – there are various ways to educate employees in financial matters. Identify larger groups of people who may face the same challenges. Speak actively on the topic yourself and compile relevant information or presentations for these teams. Here are some sample groupings:

Low earners

The salary amount has an impact on the protection afforded by Swiss social insurance. According to the Federal Statistical Office (FSO), anyone in Switzerland living on less than CHF 2,284 per month as a single person or CHF 4,010 as a family of four is classified as poor. Thanks to the coordination deduction, only a small portion goes into Pillar 2, which makes it difficult to make provision for retirement. This makes it all the more important for low-income earners to address this issue. Employers can take measures to actively support this group. Review the conditions of enrollment in your pension fund and amend them if necessary. This enables your employees to save for their retirement in Pillar 2, even for those with low incomes. You can also help your employees address their pension planning.

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Part-time employees

There is a growing tendency to work less and more flexibly. This means that the group of part-time employees, which previously consisted mainly of women, is becoming larger. Not only is it highly likely that your Pillar 2 will have pension gaps, but Pillar 1 of OASI could also be lower. Many are not aware of this or do not know what to do about it. The following six articles provide useful information for those affected.

Employees with several jobs

Those with two or more jobs are often excluded from the occupational benefits network because of their income situation, as their individual annual salaries are often below the OPA entry threshold. Even if the individual incomes exceed the entry threshold, they have to accept the coordination deduction several times.

As an employer, you have the option of lowering the OPA entry threshold for your pension fund, thus supporting your employees in their retirement provision.

You don’t want to? Then you can inform your employees that they can voluntarily take out insurance with either the Substitute Occupational Benefit Institution or one of the pension funds of one of their employers if their total annual income exceeds the OPA entry threshold of CHF 22,050 (as at: 2024). This is only possible if the relevant pension fund regulations provide for this option. More information can be found in this blog article on part-time work.

Young people

A great deal can happen in 40 years of working life. It’s understandable that young people don’t give much thought to retirement which seems so far away. In old age, however, many people wish they had started making provision earlier.

In addition, the AXA Pensions Study 2023 shows that people are less confident that they will be able to finance their accustomed standard of living from Pillars 1 and 2. This makes it all the more important for young people to improve their financial education at an early age. Those who are familiar with the Swiss pension system, as well as the mechanisms and rules of the financial markets at an early stage, those who recognize the opportunities and risks of equities, and continue their financial education can make a conscious start to accruing wealth. Organize an event for this target group and actively discuss the topic – the following blog articles can provide input to the content:

Partially retired persons and those close to retirement

Gradually withdrawing from work – at best a good option for slowly getting used to a new life situation. Since the new OASI reform in 2024, there have been more flexible options for early withdrawal. Together with the tax implications, these need to be clarified in detail.

How can managers support their employees with financial development?

Find out what your employees’ needs are. As a manager, you have the opportunity to bring the topic to the next highest management level or to the HR department. If you demonstrate the importance and impact on work performance in a comprehensible way, you should meet with open ears in your company. 

You can make an impact even without a company-wide initiative among employees. Look out for signs of financial worries – such as increased stress – among your employees and pay attention to the person in a one-to-one meeting. Maybe you’ll find out what might help the person. Even small inputs and improvements can make a difference. The more you as a manager know about pensions and financial issues, the more your employees can benefit from this knowledge.

Are your employees reluctant to talk about their financial situation? There are now various financial wellbeing platforms, budget planning and financial analysis tools that employers can offer their employees. This enables them to build up know-how in a targeted and discreet manner.

Do you or your employees already know about this? Companies that have set up their occupational benefits insurance with AXA benefit from free access to the AXA pensions portal. Employees get a quick overview at a glance and can plan their future better. Pension gaps can be identified and closed quickly.

Takeaway: financial knowledge as the key to stability

Financial knowledge can be a key market advantage in acquiring and retaining productive and loyal employees. Employers also have an obligation to inform their employees about occupational benefits insurance. If they take advantage of this, it has a long-term effect and reduces worries about retirement provision. Take advantage of this extra knowledge for your company!

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