AMIKO Anwält:innen
Nordstrasse 20
8006 Zürich
Auf Karte anzeigen
T: +41 43 543 30 30
E: kanzlei@amiko.law
AMIKO Anwält:innen
Nordstrasse 20
8006 Zürich
Auf Karte anzeigen
T: +41 43 543 30 30
E: kanzlei@amiko.law
Occupational pension provision, the second pillar of the Swiss social security system, covers various pension cases, such as old age, death or disability. Together with the benefits of the 1st pillar (AHV/IV), it aims to enable the continuation of the accustomed standard of living in the event of an insured event. The pensions are intended to guarantee the insured person an income of 60 per cent of their previous earnings. If the pension income, together with any benefits from other social insurance schemes, exceeds the limit of 90 per cent of the previous income, the benefits are generally reduced.
In the following chapters we answer questions about occupational pension provision. Do you need support? Get in touch with us. We will support you if the occurrence of a pension claim threatens your financial security or if the transition to retirement raises questions for you.
All employees over the age of 17 who earn an annual salary of more than CHF 22,050 from an employer are compulsorily insured. In the first seven years, only the risks of death and disability are insured. Retirement saving begins in the year in which you turn 25. Every employer who employs staff subject to compulsory insurance must either set up a pension scheme themselves or join one. There are exceptions in the case of unemployment, self-employment and part-time employment.
Unemployed persons who receive a daily allowance from unemployment insurance are subject to compulsory occupational benefits insurance for the risks of death and disability and are insured with the BVG Substitute Occupational Benefit Institution. Persons who do not earn an income of more than CHF 22,050 from any employer and therefore do not meet the entry threshold are not subject to compulsory insurance. If you are self-employed or work for several employers and earn a total annual salary of over CHF 22,050, you can take out voluntary occupational pension insurance. To do this, you can either register with one of your employer's pension funds - if the regulations provide for this option - or you can join the BVG Substitute Occupational Benefit Institution.
The following benefits are provided for in the occupational pension scheme:
The benefits are generally paid out in the form of a monthly pension. Depending on the pension fund regulations, you can choose a lump-sum payment instead of a pension. This option is particularly common for retirement benefits.
You can find an overview of the insurance benefits provided by your pension fund in the pension certificate. Please note: The information is not binding and may change before the insured event occurs. For example, as a result of a reduction in the conversion rate decided by the pension fund. Contact us if you do not understand your pension certificate. We will advise you and explain the individual items so that you can look to the future with confidence.
Women are entitled to retirement benefits when they reach the age of 64, men when they reach the age of 65. From 1 January 2025, the reference age for women will be gradually adjusted and increased to 65 by 2028. The reference age will be raised by three months each year. This means that women born in 1961 will reach the reference age at 64 years and three months, women born in 1962 at 64 years and six months, women born in 1963 at 64 years and nine months and women born in 1964 and later at 65 years. From 2028, the same reference age will therefore apply for men and women.
Many pension funds allow insured persons to claim retirement benefits before reaching the reference age, at the earliest after reaching the age of 58. If you are employed, this presupposes that the employment relationship ends at this time. For self-employed persons, the option of voluntary insurance ends at this time.
The amount of the annual retirement pension is generally calculated as a percentage (conversion rate) of the mandatory and extra-mandatory portion of the available retirement assets on retirement (defined contribution calculation). In the case of certain pension funds, the retirement benefits are calculated as a percentage of the insured salary (defined benefit calculation).
You can find out which calculation method is actually used for you from the regulations or from your pension fund. The amount of the expected retirement benefits is shown on the pension certificate. However, you can also request an advance calculation of your retirement benefits from your pension fund.
If you receive a retirement pension, you are also entitled to a child's pension for each child under the age of 18 and up to a maximum of 25, provided the child is in education.
If you receive a retirement pension, you are also entitled to a child's pension for each child under the age of 18 and up to the age of 25, provided the child is in education.
When you retire, you are generally entitled to withdraw a quarter of your mandatory retirement assets in the form of a lump sum. You can find out whether and to what extent you are also entitled to a lump-sum settlement from the regulations or from your pension fund. Most pension funds provide for retirement benefits to be drawn in full or in part as a lump sum. However, this is usually only the case if no disability occurs beforehand. Enquire about your options in good time. This is because the exercise of a lump-sum option is often made dependent on certain conditions.
To claim a lump-sum withdrawal, you must submit an application to most pension funds within a certain period using a special form. The deadlines vary depending on the pension fund and are usually between one month and one year. Married persons and persons in a registered partnership require the written consent of their spouse or registered partner (often with a notarised signature) to exercise the lump-sum option. The application with the written consent must be submitted within the deadline. If you miss the deadline, the retirement benefit will be paid out as a pension. It is therefore worth finding out about the options and formalities of a lump-sum settlement in good time to avoid any surprises.
There is no right or wrong answer to this question. Depending on your personal situation, one or other option or a mixed form is recommended. For example, partial lump-sum withdrawal and a reduced pension. One thing is certain: The decision is final and existential. You should therefore plan the withdrawal of your retirement benefits carefully and in good time.
You should ask yourself the following questions before deciding whether to take a pension or a lump sum:
Do you have any further questions? Contact us for a consultation.
Are you more than 40 per cent disabled and were you insured with a pension fund when the incapacity for work that later led to your disability occurred? If so, you are generally entitled to disability benefits from a pension fund. Some pension funds provide for a pension entitlement for a degree of disability of between 20 and 40 per cent.
You usually receive the benefits in the form of a monthly disability pension. If you have children, you will also receive a child's pension for each child under the age of 18 and a maximum of 25, provided the child is in education. In some cases, pension funds allow a bridging pension as long as the IV is not yet paying its benefits (> Link to the question: What is a bridging pension?).
Normally, you must first go through the procedure with the IV office before the pension fund will check your entitlement to a pension (>link to the IV procedure). If the pension fund is involved in the IV procedure, it has the same right to appeal against pension decisions as you do. This means that they can also raise objections to a preliminary decision or appeal against a ruling.
If there is a legally binding decision by the IV (IV decision) and the pension fund has been notified of this, it may be binding on the pension fund. In such cases, the pension funds must accept the pension start date or IV degree determined by the IV. If there is no binding effect, the pension fund is free to examine the entitlement to benefits.
If you have received a benefits decision from your pension fund and you have questions about the amount of benefits, the start of payment or the admissibility of benefit reductions, do not hesitate to have these points checked by a specialist.
As a rule, the Federal Disability Insurance (IV) will check whether and to what extent you are disabled. You should register with the IV no later than six months after becoming unable to work. If you register late, you risk losing your benefits. In rare cases, the pension fund will check whether you are disabled in your occupation before the IV procedure is finalised. This is known as an occupational disability. The existence of such a disability is clarified with the help of a medical report from a trustworthy doctor. If you work in the health, education and administration sectors or are employed by the Canton of Zurich, check the regulations for occupational disability benefits.
If you receive benefits from daily sickness allowance or accident insurance in the event of incapacity for work and your incapacity for work lasts for several months, the daily allowance insurer will usually ask you to register with the IV. If you do not comply with this request, you risk having your benefits reduced.
If you lose your job due to your incapacity for work, you are often confronted with tricky insurance issues. It is advisable to consult a specialist who will analyse your insurance situation with you and support you in coordinating the various insurance benefits.
If you have been awarded an IV disability pension, you can contact the pension fund with which you were insured when you became unable to work, enclosing the IV decision. It is important that you submit your claim to the pension fund, as generally only the pension fund of your last employer will be informed of the IV decision. And even this is not guaranteed. It is therefore always advisable to actively claim your pension from the pension fund.
Pension funds often refuse to fulfil their obligation to pay benefits on the grounds that they are not responsible for paying them. Among other things, they refer to the pension fund of a previous employer. If all the pension funds in question refuse to pay benefits, it is worth consulting an expert specialising in occupational benefits in order to check the chances of success of enforcing your claims in court.
The questions regarding the responsibility of a pension fund are often complex and the legal dispute with the pension funds involved requires specialised knowledge. Particularly in the case of difficult courses of illness, relapsing illnesses or multiple health-related job losses, it is worth consulting a specialist as early as the IV proceedings. This will enable you to set the course for any claim against the pension fund.
If you are unsure whether and, if so, which pension fund is liable to pay benefits in your case, we can offer you uncomplicated and cost-effective advice. So that you can better assess your chances of success.
The amount of a disability pension is determined as a percentage of the total pension. Since 1 January 2022, the so-called graduated pension system has applied, as with the IV. Under this system, a degree of disability of 40 per cent entitles you to 25 per cent of a full pension. If the degree of disability is over 70 per cent, you are entitled to a full pension. In between, the pension is determined according to the degree of disability. The pension funds may provide for other gradations in their regulations.
The total disability pension is calculated either as a percentage (conversion rate) of the retirement savings that you have accumulated up to the start of the entitlement to the disability pension, plus the sum of the retirement credits for the missing years up to retirement age (calculation according to the defined contribution plan). Or the calculation is based on a percentage of the insured earnings - for example 50% of the insured annual salary, so-called defined benefit plan.
Bridging pensions are used to prevent gaps in income due to early retirement or, in rare cases, disability. Many pension funds allow you to draw a bridging pension in the event of early retirement. You will receive this until you reach the normal retirement age (reference age) and its purpose is to avoid an early withdrawal of the AHV pension (1st pillar). This is because an early withdrawal reduces the retirement pension from the 1st pillar for life (currently 6.8% per year of early withdrawal). The disadvantage is that you generally have to finance the bridging pension yourself or at least contribute to the costs.
Only a few pension funds are prepared to pay a bridging allowance in the event of disability (e.g. BVK). This supplements the disability pension from the pension fund and serves to prevent an income gap until the IV benefits start.
Caution: Bridging pensions should not be confused with the bridging benefits for unemployed persons who are made redundant by unemployment insurance after their 60th birthday and are dependent on financial assistance until retirement (similar to supplementary benefits).
Survivors' benefits from the occupational benefit scheme - also known as death benefits - are paid out if the deceased was insured with an occupational benefit scheme at the time of death or when the incapacity for work that led to death occurred. The surviving spouse or registered partner and orphans are entitled to a survivor's pension. The pension funds may provide for further beneficiaries in the regulations who are entitled to a pension in a specific order of priority (order of beneficiaries).
Most pension funds also provide for a pension to the surviving partner if a marriage-like partnership existed for a certain period of time (usually five years) or if the surviving partner is responsible for the maintenance of one or more joint children. The civil partnership must often also be registered with the pension fund during the lifetime of the insured person or a support agreement must be submitted. Ask your pension fund in good time about the procedures for registering a civil partnership.
A lump-sum death benefit is often paid out in the event of the death of an insured person. Enquire with the pension fund about the benefits payable in the event of death.
A lump-sum death benefit is often paid in the event of the death of an insured person. Ask the pension fund about the benefits in the event of death.
If a person who was employed as an employee dies, the following benefits are available to cover the remaining dependants:
When it comes to benefits for dependants, the first thing to consider is the supplementary salary payment from the deceased's employer. If the deceased person had an obligation to support you, you can claim this additional payment from the employer. The supplementary salary benefit is not subject to inheritance law and can be claimed even if the inheritance is waived.
In the 1st and 2nd pillars, the spouse, registered partner or minor children are entitled to a widow's/widower's pension or an orphan's pension from the 1st pillar (AHV). Pension funds can also provide other death benefits. For example, a lump-sum death benefit (>link to survivors' benefits>). The group of beneficiaries is defined in the law or regulations. If there are no beneficiaries within the meaning of the law or the regulations, the retirement assets remain with the pension fund. Occupational pension benefits are not subject to inheritance law and are not part of the estate. The survivors' benefits can therefore also be claimed if the inheritance is waived.
In the event of an accidental death, spouses, registered partners and minor children are also entitled to a pension from the accident insurance scheme.
Finally, life insurance (pillar 3a or 3b) and supplementary health insurance or accident insurance can also provide benefits in the event of death.
We recommend that you check all insurance policies carefully or have them assessed by a specialist. As the payment of death benefits may be subject to time limits, we recommend that you make these clarifications immediately after the death.
If occupational pension benefits (2nd pillar) meet similar benefits from other insurance schemes, the benefits are coordinated with each other. The pension fund can reduce the survivors' or disability benefits if these, together with the other benefits, exceed 90 per cent of the previous income. In this case, the disability or survivor's pension will not be granted in accordance with the pension certificate.
The overcompensation limit can be set differently by the pension funds. For example, 100 per cent of the presumed loss of earnings. If you are partially disabled, the income from your residual earning capacity will be taken into account in addition to your pension income. If this is not utilised, the pension fund can take into account a hypothetical earned income. However, if you can prove that you are unable to find a suitable job despite your best efforts, the pension fund must refrain from recognising hypothetical income.
Pension funds can request a health declaration when new members join, but also when benefits are increased during an existing pension relationship - for example as a result of a salary increase, purchase or expansion of the pension plan. This means that you must complete a questionnaire and answer questions about your health. In the event of existing health impairments, the pension fund can make so-called health reservations. Such reservations are not permitted in the area of mandatory occupational benefits insurance (BVG mandatory scheme). In the area of more extensive or non-compulsory occupational benefits insurance, pension funds can make health reservations with regard to survivors' and disability benefits (Art. 331c CO).
If the pension fund has a health proviso, death or disability can result in a massive pension gap. On the other hand, a health proviso has no effect on retirement benefits.
Due to the significant impact on the insured person, the reservations must be specifically formulated and dated. The notification must be made at the latest when the first pension certificate is issued. A health reservation is also limited to a maximum of five years. In the event of a change of pension fund, the already expired duration of a reservation for the same condition is taken into account. Once this period has expired, there is an unrestricted entitlement to the regulatory benefits. If an insured risk occurs during the period of reservation, the pension benefits are generally reduced to the statutory minimum benefits for life.
Example: If you have been subject to a reservation regarding mental illness for a period of five years and become disabled as a result of a depressive disorder within five years, the pension fund will pay disability benefits based on the statutory minimum benefits. And this for life.
If you do not answer the pension fund's clearly and precisely formulated questions in the health questionnaire or answer them incorrectly, you are in breach of your duty of disclosure. This can have serious consequences. In the event of a breach of the duty of disclosure, most pension funds stipulate that the pension contract can be cancelled to the extent of the non-mandatory benefits. If a benefit case has occurred and there is a connection between the undisclosed illness and the occurrence of the risk, the pension fund's obligation to pay benefits for the benefit case that has occurred lapses.
We recommend that you always read the health questions carefully and fill them in truthfully. If you are unsure, it is advisable to ask your doctor for information. Never have the questionnaire completed by a third party. With your signature you confirm the accuracy of the information and bear the consequences of a breach of the duty of disclosure. This applies regardless of who has completed the questionnaire.
If you leave your pension fund before an insured event occurs, you are entitled to a termination benefit (also known as a vested benefit). This is known as a vested benefits case. Let your pension fund know what you want to do with your assets. You can consider transferring them to a vested benefits account at a bank or a vested benefits foundation or taking out a vested benefits policy with an insurance company. If you join a new pension fund, you must transfer your pension capital to the new pension fund in order to maintain your pension cover.
If you miss the deadline for informing your pension fund where your termination benefit should be transferred to, it will transfer the termination benefit to the LOB Substitute Occupational Benefit Institution at the earliest six months, but no later than two years after the vested benefits fall due. If you are unsure whether you have any forgotten vested benefits assets, you can make a written enquiry to the Guarantee Fund.
Your pension assets in a vested benefits account are tied up for the purpose of maintaining your pension cover. Therefore, you cannot dispose of it freely. However, you can have the pension assets paid out up to five years before reaching the reference age.
Prior to this, the pension assets can only be paid out in cash in the exceptional cases provided for by law:
If you are married or in a registered partnership, the written consent of your spouse or registered partner is required.
If you have an insured event or are about to have one, you are often confronted with complex, cross-insurance issues. It's difficult to keep track of everything - especially if your own health is impaired.
Don't hesitate to contact us if you have any questions or concerns - we will be happy to advise you on all matters relating to occupational benefits and assert your claims against pension funds or insurance companies. We are also happy to help you make the right arrangements at an early stage to ensure your financial security.
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