Pensions

How to read your pension statement

TIPS
| By Leo Hug |
Source: iStock / Antonio_Diaz

At the beginning of every year, employees receive a pension statement from their pension provider. It is peppered with figures and technical jargon. Comparis explains what it all means.

If you are employed and earn at least 21,510 francs per year from one employer, you are required to be insured with an occupational pension fund. Your pension statement contains, amongst other things, a forecast of the annual pension you could expect to receive.

You will find the following information on your pension statement:

  • Declared OASI annual salary

    The declared OASI (old age and survivors’ insurance, AHV/AVS) annual salary is your gross salary and forms the basis for the pension calculations. This is also the salary that is stated on the salary certificate that you use for your tax return.
  • Insured annual salary

    A specific amount is deducted from the OASI annual salary. It is called the “coordination deduction” and is currently 25,059 francs. The gross salary minus the coordination deduction gives you the insured annual salary. This amount is used as the basis for calculating the pension fund contributions.
  • Existing pension savings

    The amount of pensions savings you have is your accumulated retirement capital. It is made up of any transferred vested benefits, the employer and employee contributions and interest.
  • Benefits

    A projection shows how much pension capital you will have accumulated by the time you retire. The pension fund assumes that you will continue to earn the same amount of money and that the appropriate interest is applied. The projected retirement capital is multiplied by what’s called the “conversion rate”. This produces the annual pension you can expect to receive. In the “benefits” section, you will also find details of the benefits paid to survivors in the event of your death, or to you in the event of disability due to illness. You can use the Comparis pension calculator to find out what your financial situation could look like when you retire.
  • Financing

    The financing section shows how much money the employee and employer pay into the pension fund, with each contributing half the total amount. The money is used for two different things: the savings contributions are used to accumulate retirement capital, while the risk contributions function as insurance premiums for death and disability benefits.
  • Maximum possible purchase

    Did you earn less in the past? If so, you can top up the savings in your pension fund. Any voluntary pension contributions can be deducted from your taxable income.
  • Maximum advance withdrawal to purchase a home

    Are you thinking of buying a property? Any property that you will permanently occupy yourself can be financed using retirement savings. If you are under 50 years old, you can withdraw all your pension savings ahead of time. If you are over 50 years old, you can withdraw half your current capital, but no more than the amount you had accumulated by age 50.
  • Cover ratio

    The cover ratio shows the extent to which the pension liabilities are covered by the pension assets. If the cover ratio is 100%, the pension fund can cover your current and future liabilities exactly. If the cover ratio falls below 90%, you are considered to have a significant shortfall in cover. In such cases, the pension fund usually has to introduce restructuring measures. This generally means you need to make extra contributions. Contact your pension fund if the cover ratio is not specified on your pension statement.

The company pension is only part of your overall retirement provision. It should be considered in conjunction with the anticipated OASI (AHV/AVS) pension and any third pillar savings. You can review your overall pension situation with the help of our pension experts at Optimatis. They are familiar with possible gaps and risks associated with pensions and, thanks to its cooperation with numerous partners, can identify an appropriate solution. The consultation is free of charge and there is no obligation.

Find out more and arrange a consultation