LPP in the event of death: no systematic redistribution
Let’s take the example of Mr. X, a married executive with 2 children, who makes an annual purchase to improve his pension provision and tax savings. In the event of death, under the BVG, the accumulated pension assets are generally used in full to finance survivors’ pensions (widow’s/widower’s and children’s pensions). In addition to the savings on premiums, optional purchase amounts are often used to finance disability, spouse’s or child’s benefits – these pensions are therefore left with the pension fund – and therefore not paid out in the form of an additional death benefit. However, it should be noted that this problem can be solved by regulatory changes that we are used to drafting: either by including the return of all assets saved on the day of death, and/or by adding death benefits (fixed sum or % of insured salary).
BVG/LPP in the event of death: the case of adult children not entitled to a pension
It’s also important to note that children who have reached the age of majority – 18, or 25 for students – and who are not entitled to a pension are at a disadvantage. Indeed, the LPP distinguishes between two categories: children entitled to an orphan’s pension and other children not entitled to such a pension. For example, in the event of the death of a divorced man with a 15-year-old daughter and a 26-year-old son (a student), the pension fund will pay the assets to the younger child. We note that this family situation unintentionally creates differences in treatment within the insured family. Solutions are also possible, and Argos Group regularly develops them with its clients.
Full details of the relevant sections of the law can be found at: https://www.admin.ch/opc/fr/classified-compilation/19820152/index.html (section 18-22)
When it comes to occupational benefits, there are a number of very important variables. That’s why our benefits consultancy analyzes and presents all these issues in collaboration with the benefits committee, so that the company can choose the best benefits coverage.
So don’t hesitate to contact us, we’re at your disposal at our offices in Gland or via our website www.argos-group.ch.
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