In this article
Key points
- Together with the OASI/DI, the second pillar should secure at least 60% of the last salary: for managers, this often leaves pension gaps.
- Extra-mandatory plans let you save more, adjust the risks covered and choose the form of benefits.
- Supplementary plans for managers and executives are inexpensive and highly flexible.
- For the part of the salary above CHF 136,080 (2025), 1e plans let insured persons choose their own investment strategy.
The Federal Constitution (Art. 111) and the BVG/LPP (Art. 1) state that, together with the OASI/DI, the second pillar should secure at least 60% of the last salary on retirement, disability or death.
This legal threshold does not always reflect actual individual needs, which leaves pension gaps. To close these income gaps and offer greater financial security, companies can set up extra-mandatory supplementary plans for their employees.
Setting up occupational pension provision in the company
The law requires all employees to be insured under the BVG/LPP. A company can join one or more pension institutions, depending on its staff structure and how it wants to shape its occupational pension provision.
Many second-pillar pension institutions operate on the market. The choice of institution and the level of insured benefits are generally decided by the pension committee.
Mandatory or extra-mandatory pension provision?
Mandatory pension provision applies conversion rates, salary thresholds and minimum benefits set by law, which are the same for all insured persons. Extra-mandatory pension provision, on the other hand, allows more generous supplementary plans.
What extra-mandatory provision makes possible
Table 1| Criterion | Mandatory provision | Extra-mandatory plans |
|---|---|---|
| Framework | Conversion rates, salary thresholds and minimum benefits set by law | Plans defined by the company with the pension committee |
| Savings | Minimum benefits, the same for everyone | Higher savings contributions that close pension gaps |
| Risks covered | Statutory cover for old age, death and disability | Cover adjustable to your objectives |
| Benefits | Legal framework | Pension, lump sum or a combination, as you choose |
| Tax | Legal framework | Optimisation for both employee and company |
Offering extra-mandatory plans is the company’s decision, taken together with the pension committee. Because they improve pension conditions, they are benefits for employees. The company can offer them to all employees subject to the BVG/LPP or only to a defined group, in compliance with the legal rules on collectivity.
Supplementary plans for managers and executives
Occupational pension provision is one of the key factors that make a job attractive.
Maurizio Reichlin, Assidu
A company can treat its staff categories differently by giving each its own pension plan, or place all insured persons, or defined groups, in supplementary plans. These plans are usually reserved for management positions: we then speak of "supplementary provision", as opposed to "basic provision".
Costs and flexibility
Supplementary provision costs less than basic provision and can be used by any company. It offers great flexibility, both in defining the insured benefits and in choosing which staff categories are covered.
Adjustable cover
Biometric risks (longevity, death, disability) can be included, adjusted or excluded according to your objectives. A supplementary plan may, for example, provide only disability benefits, or only savings and death cover. The level of cover does not depend on the BVG/LPP minimums: the scope for customisation is much wider.
How benefits are paid
The form of payment can be chosen freely. For example, all benefits can be paid as lump sums (retirement capital, death capital, disability capital), excluding a pension. A supplementary plan also helps to stagger the withdrawal of retirement capital over several years, which benefits both tax and planning.
Investments
In basic plans, capital follows the single investment strategy chosen by the pension institution. Supplementary plans give access to different asset allocations and, for the highest salaries, to 1e plans under Art. 1e BVV 2/OPP 2.
1e plans: autonomy and competitive advantages
1e plans give insured persons a high degree of autonomy in choosing the investment strategy for their pension capital, with a wide range of strategies and direct participation in the capital markets.
Their main strengths:
- opportunities for capital growth
- free choice of investment strategy
- very low costs for company and employee
- savings contribution rates of your choice, potentially very high
- no redistribution of returns within the insured collective
- diversification of pension provision
- tax optimisation
- no risk of underfunding for the company
- retention of key people and executives
These features make supplementary plans particularly well suited to managers, executives and high earners.
Conclusion
Occupational pension provision offers a wealth of opportunities. Solid expertise and specialist analysis make it possible to design tailored solutions that maximise the benefits for both company and employees.
As tools for harmonising pension provision, planning, optimising tax and retaining staff, supplementary plans can give a company a winning edge in the competition for the best talent.
Pension provision is a long-term relationship. Our specialists discuss your wishes and objectives with you, then support you over the years to guide your decisions.
Insurance and Pension Consultant · Individual Pension Coordinator · Insurance Specialist with Federal Diploma of Higher Education
