Second-pillar solutions are complex yet essential for optimising your occupational pension provision.
Second pillar solutions are complex, multi-faceted and can reach a high level of sophistication. They often need to be more in line with the company's social ambitions and the needs of its employees. Here are a few solutions that can help you decipher the proper structure for your company:
At least a legal solution
A basic plan solution that meets the minimum requirements of the Swiss Federal Law on Occupational Retirement, Survivors and Disability Pension Plans (BVG/LPP). This solution pools asset management with defensive profiles. A company must ensure salaries of up to CHF 88,200 and may apply a coordination deduction of up to CHF 25,725. For example, an employee earning a gross annual salary of CHF 200,000 may only be insured for CHF 62,475. It should also be noted that the minimum conversion rate of 6.8% (defined later in this article) only applies to this guaranteed minimum. As soon as the income of your company's employees exceeds CHF 90,000 per annum, there could be a significant gap in your pension. Those with less capital due to a property purchase, divorce or international career will see their death, disability and retirement benefits reduced.
Wrap-around solution
A basic plan solution that includes the legal minimum and a "supplementary" part in a single contract. This solution pools asset management with a defensive to balanced profile. This option is often recommended because it is the simplest from an administrative point of view. It is intended for the company's entire workforce and can cover the salary admitted according to the principles of adequacy of the occupational benefit ordinance (CHF 882,000). However, a salary ceiling can be used to set up a framework plan for a specific category of person within the company.
Extra-mandatory solution/framework plan
Complementary plan solution that will be added to the legal minimum plan or a wrap-around plan. It is generally defined with specific criteria to describe a particular group of people within the company. The asset management is pooled, but a broader investor profile can be chosen (defensive to growth).
Solution 1e/bel-étage
A supplementary plan solution is reserved for people with a salary over CHF 132,300 (2023 figure), to which additional criteria can be added to define the circle of persons. The unique feature of this plan is that wealth management becomes individualised, with a choice of investment profiles, including dynamic solutions.