According to Zurich's Fairplay Study, only one in five people gives consideration to the structure of occupational retirement provision when choosing an employer. Given that there are major differences in benefits between the different pension funds, this is quite surprising. When it comes down to it, retirement assets from occupational retirement provision make up the largest part of most working people's assets – but many people don't know this.
Are you looking for a job? Then ask in the interview what benefits your preferred company offers in its pension fund. A good retirement provision solution is part of your salary and can make a big difference in the level of your retirement and risk benefits.
The law specifies the minimum percentage of the insured salary that must be saved in the pension fund. The amount of these so-called savings contributions increases gradually, depending on age and amounts to 7 percent between 25 and 34 years, 10 percent between 35 and 44 years, 15 percent between 45 and 54 years and 18 percent between 55 and 65 years. Anything above this is a bonus and helps to build up higher retirement savings capital.
If there is an optional savings plan, you can choose between different savings plans depending on your stage of life. This means that you can voluntarily pay more into the pension fund and thus actively shape your occupational retirement provision.
According to the law, the pension fund does not insure the entire salary, just a part of it: A fixed amount, known as the coordination deduction, is deducted from the gross salary. This means that you only save a portion of your salary for retirement. This is particularly disadvantageous if you work part-time. Be sure to ask: Is the coordination deduction always included in full, or is it adjusted to the workload so that there is no pension shortfall? It’s even better if the coordination deduction is omitted completely – even with a full-time workload. That’s because if your entire salary is insured, you can save considerably more in the pension fund. You will pay higher contributions, but you will also receive more money after retirement.
Depending on the cost structure and investment performance, savings interest rates can differ significantly between different pension funds. Ask how high the interest rate is in your case. After all, it determines how much your retirement savings capital grows.
By law, the employer must pay at least 50 percent of the savings and risk contributions. However, depending on the retirement provision strategy, they can also assume a larger share. For you, this means that you'll have more in your wallet at the end of the month.
According to the law, only a maximum annual salary of 90,720 francs minus the coordination deduction is subject to compulsory insurance. However, a modern retirement provision solution also insures salaries that exceed this amount, so that there is no pension shortfall. The maximum insurable salary is 907,200 francs.
If you take unpaid leave or a sabbatical, you no longer receive a salary, so you no longer save money in the pension fund. However, the retirement provision solution can be continued despite the break from work: In most cases, this is possible for a period of six months to one year. You usually pay the premiums retroactively after your return and remain insured during your absence. In this way, your retirement savings capital continues to grow and you avoid a pension shortfall. The pension regulations provide information on how this is carried out in your pension fund.
Especially important for families: How are disability and death benefits structured? Ask for the pension regulations and find out which benefits are paid out under which conditions.
If you are over 50 or are already thinking about retirement, it’s worth asking about the conversion rate, as this determines the amount of your retirement pension. An important point: Following the failure of the BVG reform, the statutory conversion rate for the BVG minimum is currently still 6.8%. Because many pension funds offer higher overall benefits (known as the super-mandatory part), the individual conversion rates for the overall payment can be significantly lower.
Something else to know: Find out what flexible retirement options your future employer offers and what pension benefits are associated with them. Depending on the retirement provision strategy, you will be able to retire earlier or later – or gradually reduce your workload.
Are you under 25? Then ask your future employer whether you can get started saving into the pension fund right away. By law, retirement savings are only compulsory starting at the age of 25. However, companies have the option of allowing their employees to save for retirement at an earlier age, for example starting at the age of 18. The earlier you start saving, the greater your retirement pension will be later on.
As an employer, you have the opportunity to score points with an attractive pension fund solution. Point out advantageous terms to candidates during the interview. After all, the importance of occupational retirement provision is often underestimated. Younger people have different needs than older people who are already thinking about retirement.
