Pillar 2 retirement provision is based on collective (employee-employer) savings. The savings process begins when the insured reaches the age of 25 and has an annual income above the entry threshold (CHF 22,050 from January 2023). Savings cease when the insured reaches retirement age.
The retirement savings capital accumulated by the insured on his individual account over the years of insurance will be used to finance the retirement pension. For this purpose, the accumulated capital is converted into an annual retirement pension at a conversion rate of 6.8% for both men and women, in line with the minimum stipulated by the Swiss Federal Law on Occupational Retirement, Survivors’ and Disability Pension Plans (BVG/LPP).
In Switzerland, according to the FSO, two-thirds of people received an old-age benefit from at least one of the three pillars of the old-age pension system before reaching retirement age – 65 and 64 respectively – over the 2018-2020 period.
On the other hand, only a third of people reach retirement age before considering drawing an old-age pension.
According to these figures, many of us in the workforce are considering taking early retirement, or at least gradually reducing our working hours, but we’re concerned about the impact this could have on our future pensions.
This is because pensions are generally not sufficient to maintain the previous standard of living, even if you retire at the normal retirement age.
With this in mind, it’s worth taking a closer look at the particularities of occupational pension provision (2nd pillar) between the ages of 58 and 64/65. We present the various options available to you in two expert articles recently published in Le Temps and PME magazine; please feel free to consult them or contact us for further information.
We are at your disposal to analyze your situation and implement the best solutions for your needs.
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