Since November 12, employers have been able to pay the employee’s share of occupational pension contributions from the employer’s LOB contribution reserve.
Employers must notify the pension fund in writing of the use of employer contribution reserves for the payment of employee contributions.
This does not require any changes to the pension fund regulations or the affiliation contract. They can therefore use this reserve for the entire premium.
As a reminder, the Swiss Code of Obligations stipulates in Art. 331, para. 3 that the employer may finance his contribution (part of the employer’s premium) to the occupational pension scheme from his own resources or from reserves of employer BVG contributions previously accumulated for this purpose.
This contribution reserve is used to finance future premiums and is not refundable to the employer. It serves to guarantee payment of employer contributions in difficult economic situations.
In good years, the company can build up a contribution reserve (3 to 5 annual employer premiums) that can be used to reduce business profit, since it is fully deductible.
Amounts allocated to this reserve are expensed in the year of payment.
For reference, you can consult theOrdinance COVID-19 occupational benefits, which was published by the Federal Council on November 11, 2020.
