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Pillar 2 is a type of private pension and, along with pillar 1 and pillar 3a/3b, is one of the three pillars of the Swiss pension system:
The occupational pension (BVG/LPP) forms the second pillar of the social security system in Switzerland. Together, pensions from the first and second pillars should amount to around 60-70% of an employee's most recent salary. This should allow employees and their families to maintain their standard of living at an acceptable level.
The occupational pension is compulsory for all employees from the age of 18 who have a minimum annual income of 21,330 francs and a maximum annual income of 85,320 francs. However, in the first years of employment, only the risks of death and disability are covered. Once the employee reaches the age of 25, capital is accumulated for the old-age pension as well. Old-age pension savings continue to accumulate until the employee stops working or retires.
Who is not covered by an occupational pension?
People who are not employed, people with a gross annual salary of less than 21,330 francs, self-employed people and employees with a contract of three months or less are not covered by the statutory occupational pension.
The insurance benefits provided by the pension depend on the personal assets available in the individual pension scheme. If you want to remain fully insured, you need to close any contribution gaps. Additional contributions to the pension scheme can be deducted from your taxable income for that year.
Make sure that your pension assets are transferred to the new pension scheme. If you hand in your notice and do not start a new job straight away, you should arrange for your pension assets to be transferred to your choice of vested benefits foundation.
Compulsory salary contributions to pillar 2
|Age||Max. employee in %||Max. employer in %|
|21 - 24||-||-|
|25 - 35||3.5||3.5|
|35 - 45||5.0||5.0|
|45 - 55||7.5||7.5|
Ideally, contributions to the pension over a period of 40 years will amount to 500% of the coordinated salary. Accordingly, the total retirement savings capital will comprise five times the coordinated annual salary plus the accrued annual interest.
Employers are free to pay the employee contributions if they wish or make further payments into the pension scheme. These additional employer payments, just like any occupational pension contributions, are salary components that are not taxed as income or wealth.
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The subject of pensions is complex. There is often not enough time to research everything in detail. If you wish, you can seek advice from our partner service Optimatis. Our experts have the information that you may spend a long time searching for. Benefit from their expertise by arranging a no-obligation consultation.
The independent partner service Optimatis and its qualified staff will work with you to establish a clear overview and produce a snapshot of your current situation. Optimatis can offer you the solution that best fits your needs from the wide range available on the market – a good reason to seek advice from an independent expert.
You just need to request an appointment and a specialist advisor will be in touch with you. During the meeting, you can decide how and whether you wish to proceed with the solutions proposed.
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