In this article
Key points
- The quality of the pension plan increasingly influences the choice of employer, especially among younger generations.
- The BVG/LPP sets a minimum; extra-mandatory benefits become a competitive advantage.
- Full insurance or semi-autonomous foundation: maximum security on one side, return potential on the other.
- Part-time work, contributions, beneficiaries, conversion rate, costs: there are many points to check.
In Switzerland, around 1,300 pension institutions manage assets of CHF 1,129 billion (2023 figures). To simplify administration, many employers join collective pension foundations.
This standardisation raises a question, however: can companies still offer attractive pension solutions to their employees, solutions convincing enough to attract new talent?
In an increasingly competitive labour market, occupational pension provision is no longer a mere legal formality. Employees have become more aware of the importance of saving for retirement, and staff remain a key success factor. A well-designed pension plan therefore becomes a strategic tool for keeping teams motivated and loyal.
An attractiveness factor for younger generations
Younger generations increasingly value flexibility, remote working and part-time options: salary is no longer the only criterion. When comparing two employers, the quality of the pension plan and the benefits of the pension fund play a growing role.
Not all pension institutions are equal. When negotiating a contract, it is therefore essential to find out about the benefits offered by the employer and its pension institution, and to be able to read and interpret the conditions correctly.
The BVG/LPP as a basis, extra-mandatory benefits as a lever
The Federal Act on Occupational Old-Age, Survivors’ and Invalidity Pension Provision (BVG/LPP) sets the mandatory minimum benefits, known as basic provision, that every employer must meet. If it wishes and has the means, an employer can set up a more generous plan within this minimum framework.
Offering extra-mandatory benefits is a significant competitive advantage that makes the company more attractive on the labour market. Given the complexity of the subject, it is strongly advisable to consult an occupational pension specialist.
Full insurance or semi-autonomous foundation?
The first question to settle is the type of pension institution. The two models reflect different priorities.
Two models of pension institution
Table 1| Criterion | Full insurance | (Semi-)autonomous foundation |
|---|---|---|
| Risks | All covered by the insurer: investment, death, disability and longevity | Death and disability reinsured with an insurer; investment risk borne by the foundation |
| Security | Retirement assets fully guaranteed, funding ratio always at or above 100% | No full capital guarantee; fluctuation reserves cushion market swings |
| Returns | Cautious investments: low but stable returns | Market investments: potentially higher returns over the long term |
| For insured persons | Maximum security | Direct share in investment results |
Key questions for a successful company pension plan
Beyond the type of institution, these are the main points to examine:
- Benefits: is the plan limited to the BVG/LPP minimum, or does it offer more generous extra-mandatory benefits?
- Part-time work: is the coordination deduction adjusted to the level of employment, or does a fixed deduction penalise part-time employees?
- Retirement credits: do they follow the BVG/LPP minimum rates, or do higher contributions grow retirement assets faster?
- Employer’s share: does the employer pay more than the legal minimum of contributions?
- Profiles: are separate plans needed for management, managers and employees? A single foundation can offer several.
- Disability and death: how well do the benefits protect employees and their families?
- Beneficiaries: who receives the benefits in the event of death?
- Interest on assets: a cautious approach with a modest guaranteed return, or a dynamic approach with greater potential? Keep an eye on the funding ratio and the use of fluctuation reserves.
- Conversion rate: what rate converts the capital into a pension, and how is it changing? Projections show the benefit at the reference age and in the event of early retirement.
- Administrative costs: are they competitive? Have they been compared with other providers?
- Support: will the chosen partner keep the company and employees informed over time, with full transparency?
These questions are only a sample of the points to assess. They show how many complex factors are at play, and why occupational pension provision is a strategic pillar for any employer wishing to stand out with innovative remuneration models.
Conclusion
An attractive pension offering improves employee well-being, enhances the company’s image and makes it sought after by talent on the market.
A company that takes care of its occupational pension provision shows a real commitment to its employees, fostering mutual trust and loyalty.
Maurizio Reichlin, Assidu
As a broker specialising in employee insurance, Assidu supports companies with tailored advice to build an optimal pension plan. Explore this subject with our specialists to find the solution that best meets your needs.
Insurance and Pension Consultant · Individual Pension Coordinator · Insurance Specialist with Federal Diploma of Higher Education
