LPP (pillar 2)
Enrolling employees, choosing the fund, plans for senior staff: pillar 2 is a major social-security cost, too rarely put out to competitive tender.
Two minutes is all it takes: tell us who you are and what needs covering. We come back with compared quotes.
The essentials
As soon as an employee earns more than the entry threshold, an annual salary adjusted regularly by the Federal Council, the employer must insure them under pillar 2. Cover for the risks of death and disability starts at age 18, retirement savings at 25. Enrolment is therefore not a choice: it is a legal obligation for which the employer bears responsibility.
What varies greatly is the fund. Most SMEs join a collective foundation, and they are far from equal: the interest credited on savings, the conversion rate on the extra-mandatory portion, administrative costs, funding ratio and financial strength differ markedly from one institution to another. Comparing these parameters is a direct way of improving your employees’ retirement, without touching the payroll.
Beyond the mandatory scheme, the company retains real room for manoeuvre: extra-mandatory plans, executive plans for higher salaries, a contribution split more favourable than the legal minimum. Well designed, these choices help retain key employees and form part of accepted tax planning.
What this insurance covers
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Retirement pensions
The accumulated savings are converted into a pension at retirement, or paid out as a lump sum depending on the fund’s regulations and the insured person’s choice.
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Disability
A disability pension and children’s pensions supplement the federal AI benefits when the incapacity to earn persists.
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Death
Spouse’s, partner’s and orphan’s pensions protect the employee’s family; the fund’s regulations set out the possible beneficiaries.
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Extra-mandatory plans
A wider insured salary, higher savings contributions: the company improves benefits beyond the legal minimum, for all or part of its staff.
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Executive plans
For higher salaries, a separate plan insures the portion of pay above the mandatory scheme, with its own savings options.
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Home-ownership promotion
Pension savings can be withdrawn or pledged to finance owner-occupied residential property for the insured person’s own use.
Who it is for
- Companies that employ staff and must join a pension institution.
- SMEs affiliated to the same collective foundation for years, without a recent comparison.
- Companies that want to strengthen provision for senior staff and key employees.
- Growing employers: first hires, workforce takeovers, mergers of pension plans.
- Sole proprietors who wish to join pillar 2 on a voluntary basis.
How we support you
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Analysing your risks
What you have, what is missing, what overlaps: an honest assessment.
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Competitive tenders
Several insurers approached against a precise specification, compared item by item.
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Long-term follow-up
Set-up, renewals, claims: a single point of contact, year after year.
Frequently asked questions
Is LPP affiliation compulsory for my company?
Yes, as soon as you pay an employee an annual salary above the entry threshold, adjusted regularly by the Federal Council. The employer chooses the pension institution, registers its staff and deducts the employee’s share of contributions from pay. Without affiliation, the company is assigned by default to the national substitute institution, rarely the most advantageous solution.
Can a company change pension fund?
Yes. Termination follows the notice periods of the affiliation contract, most often for the end of a calendar year, and the change requires the agreement of the staff or their representatives. Members’ savings are transferred to the new institution. A well-run tender compares the interest credited on savings, conversion rates, costs and financial strength, not just risk contributions.
What is a buy-in to pillar 2?
A voluntary payment that closes a pension gap, deductible from taxable income within the limits calculated by the fund. Two stable rules deserve attention: a lump-sum withdrawal within three years of a buy-in can call the tax advantage into question, and an early withdrawal for home ownership must be repaid before a buy-in becomes deductible. We check these points before any payment.
How can I optimise my company’s LPP scheme?
Several levers are recognised and well proven: paying more than half of the contributions, adapting the coordination deduction for part-time staff, increasing savings contributions by age bracket, or offering members a choice between several savings plans. These measures are deductible for the company and directly improve employees’ future benefits.
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Jules Rossier, non-tied insurance intermediary within the meaning of Art. 45 of the Insurance Supervision Act (ISA), registered with FINMA under no. F01581788.