Occupational pension provision in Switzerland is undergoing constant change. Companies and pension funds face the challenge of continuously adapting their pension solutions to changing conditions and the needs of their employees. A key issue here is striking a balance between the attractiveness, flexibility and sustainability of the benefits offered.
In practice, the classic cash balance plan is the dominant type of plan. Here, a fixed percentage of the salary is paid into a personal retirement account, which accumulates over the entire working life. Upon reaching retirement age, this credit can be converted into a lifelong pension. In recent years, however, so-called 1e plans have increased in importance. They allow plan members to choose from various investment strategies and thus to individualise their pension provision to a greater extent. While these plans offer more freedom of choice, the insured persons also bear the investment risk themselves.
Another trend is the increasing flexibility of contribution scales. Almost all companies offer their employees the option of choosing between different savings contribution levels. This allows individual life situations and financial possibilities to be better taken into account. A particularly attractive option is to make tax-privileged purchases through higher contributions, thereby specifically strengthening one's own retirement provision. In addition, many pension plans allow plan members to start contributing to occupational pension schemes before the statutory minimum age of 25.
The definition of insured salary is another important aspect. In addition to basic salary, many companies also take variable salary components such as bonuses into account, either in full or in part, for pension benefits. The so-called coordination deduction, which is deducted from the relevant salary, varies from company to company and has a noticeable effect on the amount of the insured salary, especially for employees with lower wages. Incidentally, most companies insure up to the maximum legally allowable salary, which means that even higher incomes are comprehensively covered.
Part-time work is widespread in today's working world. Many pension funds adjust the coordination deduction for part-time employment to avoid discrimination. Nevertheless, the maximum deduction often remains in place for higher wages, which can lead to certain inequalities.
The interest rate on retirement assets is a key element in long-term wealth accumulation. The WTW SLI® Pension Benchmarking Study 2025 shows that the interest rate on retirement assets varies greatly between years and between individual pension funds. On average, it has been around 4 per cent over the last five years, which is well above the statutory minimum interest rate. Over a long period of time, this leads to a significant compound interest effect and thus to a noticeable increase in retirement assets.
There are also considerable differences between companies in terms of disability and survivors' benefits. While the amount of insured disability pensions has remained stable on average, death benefits vary significantly, for example through additional lump-sum payments. This can play an important role in the financial security of survivors.
In Switzerland, pension plans are generally financed on a parity basis, meaning that employers and employees make contributions of at least equal amounts. In practice, however, there are significant differences: some companies pay up to three times more than others. On average, employers cover a large portion of the savings and risk contributions, which further increases the attractiveness of pension plans.
A much-discussed topic is the conversion rates used to convert accumulated retirement assets into a lifetime pension. After a period of reductions, conversion rates have stabilised in recent years, although there are still significant differences between individual pension funds. Most funds no longer differentiate between genders. Only a few plans offer the option of individually choosing the amount of the partner's pension in retirement.
Overall, many Swiss companies offer their employees generous and flexible pension solutions that go far beyond the minimum legal requirements. Nevertheless, communication remains a key issue: many insured persons only have a basic knowledge of their pension benefits. Targeted and understandable information is therefore crucial to ensure that employees recognise the advantages of their pension solution and can make the most of them.
