Occupational Pension (LPP/BVG)

The employer has to pay a contribution at least equal to the contribution of its employee. Generally, the insured party pays 50% of the premium and the employer pays the other 50%.

An increase/decrease in salary during the year takes effect immediately or retrospectively if the change is announced subsequently.

An increase/decrease in contribution can occur on 1 January of the current year without your salary having changed.

Such an increase/decrease may be due to:

• the retirement assets’ rate having changed on 1 January depending on your age category
• a change having taken place in the occupational pension plan that is binding between the pension fund and your employer
• The pension fund having changed its pricing policy for the risks of disability and death

You are probably not yet 25. So far, you have only been insured for the risk of death and disability. Your contributions to your retirement assets will start on 1 January following your 24th birthday.

If you do not know where to find your LPP/BVG pension assets, contact the Centre for the 2nd pillar which is the body competent for providing information on forgotten LPP/BVG assets.

It is also possible that when you left your previous pension fund, you received a form for transferring your vested benefits, but that you did not fill it in or send it.

Six months after you leave a pension fund, your benefits, i.e. your entitlements, are transferred to the Fondation Institution Supplétive LPP/BVG or ‘substitute occupational benefit institution’ in Zürich, which handles assets for people who have not given instructions about them.

The Swiss Federal Law on vested benefits requires your full termination benefits to be transferred to your new pension provider. In order to enable us to transfer your assets, you should let us have the full details of your new pension fund/institution by using the Vested Benefits form.

You should then send the transfer details given by our fund to your former employer's pension institution (or “vested benefits” fund). As soon as the vested benefits are received, they are incorporated into your account and a new pension certificate is sent to you.

There are two different situations if you do not have a new job:

• If you have not reached retirement age (58 at the earliest), your termination benefits may be paid to you only for pension purposes. You must therefore pay your benefits into a vested benefits account, or into a vested benefits policy. If you are unemployed when you leave the pension fund, and if you receive unemployment benefit from the unemployment benefit provider, you will be insured with the Fondation Institution Supplétive LPP/BVG or “substitute occupational benefit institution” during this period. However, this insurance covers only the risks of disability and death, and not your retirement pension proper. You should therefore open a vested benefits account. In order to enable us to transfer your assets, you should give us the full details of your new pension fund/institution by using the Vested Benefits form. Further information about occupational pension coverage for unemployed people is available on the website www.espace-emploi.ch.
• If you have reached the age of 58 at the time you leave the pension provider, and if you are declared as an unemployed jobseeker, it is compulsory to transfer the termination benefits to a vested benefits fund. Conversely, if you are not declared as unemployed, you are entitled to retirement pension benefits. In order to enable us to transfer your assets, you give us the full details of your new pension fund/institution by using the Vested Benefits form. In the event that you are taking early retirement, please contact us so that we can give you the appropriate documents.

An insured person may demand payment in cash of the 2^nd pillar pension benefits, if he/she can prove that he/she is leaving Switzerland permanently to settle abroad. However, the terms and conditions differ depending on the country of destination.
 

• If the insured person leaves Switzerland permanently for an EU/EFTA country that requires its citizens to insure themselves against old age, death and disability risks, payment in cash of the LPP/BVG pension benefits is not possible. However, a cash payout of the non-compulsory portion of the benefits is permitted.
• If the insured person leaves Switzerland permanently for an EU/EFTA country that does not require its citizens to insure themselves against old age, death and disability risks, all benefits acquired under the LPP/BVG plan can be paid in cash. In this case, you must send us a certificate issued on request by the “Fonds de garantie LPP/BVG” (www.sfbvg.ch)
  Fonds de Garantie LPP/BVG
  PO Box 1023
  3000 Bern 14
• If the insured person leaves Switzerland permanently for a country that is not a member of the EU/EFTA, all benefits acquired under the LPP/BVG plan can be paid in cash.

Pursuant to Swiss Federal Law (Article 5a LFLP/FZG), you should supply the following documents to the fund:

• the Vested Benefits form, regardless of your status
• a certificate of residence for your new domicile
• if you are a cross-border commuter, a certificate of cancellation of your cross-border commuter permit
• if you are a foreign national, a certificate of cancellation of the residence permit
• if you are a Swiss citizen, a residents registration certificate

as well as the following document(s), depending on your civil status:

• if you are single, a recent civil status certificate
• if you are divorced, a recent civil status certificate and a copy of the divorce judgment
• if you are married, the officially legalised signature of your spouse (municipality, notary, Groupe Mutuel branch)

The termination benefits of a Swiss pension institution may not be transferred directly to a foreign pension system (except for in Liechtenstein).

Pursuant to Swiss Federal Law (Article 5b LFLP/FZG), the insured person may demand payment in cash of their termination benefits when they become self-employed, and when they are therefore no longer obliged to be insured through the LPP/BVG scheme.

The person must:
- supply to their pension institution the documentary evidence of them starting self-employment (renting of premises, purchase of equipment, certificate from the AVS (old-age and survivors pension insurance scheme), registration in the trade register, etc.)
- request the payout of their benefits during the year following the start of their self-employed activity as their main activity

The following document(s) should be enclosed with your request, depending on your civil status:

• if you are single, a recent civil status certificate
• if you are divorced, a recent civil status certificate and a copy of the divorce judgment
• if you are married, the officially legalised signature of your spouse (municipality, notary, Groupe Mutuel branch)

Cash payouts are liable to a distinct flat tax on lump-sum benefits at the time of payment. If you are living abroad, we are obliged to withhold the tax at source. If Switzerland is bound by a double taxation agreement with the country in which you live, you may ask for it to be refunded to you.

You should declare the date of your (civil) wedding or of your (enforceable) divorce, and any change of name to the fund so that it can record your new personal data.

For a divorce, sharing the LPP/BVG assets between the spouses relates to the assets acquired by each spouse for the duration of the marriage. The assets acquired before the marriage are not shared. The revision of sharing of occupational pensions (that came into force on 1st January 2017) makes provision for sharing when one of the spouses receives a disability pension or a retirement pension of the 2nd pillar. As regards your LPP/BVG assets, the fund has to make a calculation in order to determine the vested benefits acquired during your marriage. To that end, we will need to know the date of the (civil) wedding, and the date of filing of the petition for divorce with the court.

Non-married insured parties may authorise their non-married partners to benefit from the same survivor benefits as a spouse would have received on their death.

Provided that:

• the two partners live together similarly to being married, and have lived in a shared home without interruption for the five years immediately preceding the death of the insured party, or live together in a shared home and have at least one dependent child in common
• the two partners are neither married, nor related (in accordance with Article 95 of the Swiss Civil Code)
• the two partners are not registered in accordance with the Swiss Law on Registered Partnerships
• the surviving partner does not receive a spouse's pension or a partner's pension from a previous marriage or from a previous partnership
• the Declaration of partner's pension form, duly filled in, must have been given to the pension institution while the insured party is alive