Forward-looking pension fund solutions: Three experienced managing directors report

Opportunities for customizing occupational retirement provision do exist. The Federal Law on Occupational Old-Age, Survivors' and Disability Pensions (BVG) defines minimum benefits for all employees from the age of 17. But nowadays, minimum benefits are scarcely enough for a person to sustain their usual standard of living after retirement – as was originally intended. For this reason, it is worth all entrepreneurs reviewing their pension planning solutions and bringing them up to a standard relevant to the present day.

The retirement provision strategy of Kostad Schweiz AG focuses on saving for old age. Sustainability is a key concern for the company, which sells rapid charging stations for electric vehicles. Consequently, a sustainable solution is also required for its retirement provision. "Despite the fact that we are a young company in its start-up phase, a good retirement provision solution is important to me," stresses Managing Director Kajetan Mazenauer, noting that retirement provision begins sooner than you might think. He deliberately chose a pension plan with savings contributions that are 3 percent above the statutory minimum. This enables employees to build up higher retirement savings capital in the 2nd pillar.

The law states that retirement savings are mandatory from the age of 24. The legally stipulated amount of savings contributions varies according to age. However, companies have the option of increasing savings contributions in their retirement provision strategies. In addition, they can enable their employees to begin with their retirement savings early, from the age of 18 for instance. The earlier the savings process starts, the higher the retirement pension. From his own experience, Mazenauer is aware of how valuable this is. His first employer allowed him to start making provision for old age in the pension fund from the age of 17. He likewise wants to offer such benefits to his employees.

There is considerable scope for customizing occupational retirement provision. Companies can shape their retirement provision strategies entirely in line with their individual requirements. Kajetan Mazenauer makes good use of this: "Once we become profitable, I'm going to adjust the pension plan and provide 60 percent of the contributions as the employer." Employers are legally obliged to pay at least half of the contributions into the pension fund. Those who pay more – such as 60 percent – voluntarily ensure that their employees have more money available to them at the end of the month. This is a great argument during salary talks. An additional benefit: While the company may pay higher pension fund contributions, it can deduct these costs as operating expenses.

"Nagli," Switzerland's only nail factory, also recently adjusted its pension fund solution. The industrial company from Winterthur insures higher salary proportions than is required by law. "We were convinced that we had a modern and fair retirement provision solution," says Rainer Thomann, the former Managing Director. By chance, he learned of opportunities for action with respect to the coordination deduction. According to the law, the pension fund does not insure the entire salary, just a part of it. For this reason, a coordination deduction is deducted from the salary – this part is essentially not insured in the 2nd pillar. Employers can, however, voluntarily waive the coordination deduction or adjust it to the part-time working hours. This helps women in particular to minimize their pension shortfall. In this way, each employer makes a valuable contribution – not just for a higher retirement pension but also for better risk coverage. "I am grateful that we now have a coordination deduction that adapts to the degree of employment. It is an excellent reflection of our corporate philosophy 'People before profit'," says Rainer Thomann.

Healthcare specialists are in short supply. This is also the experience of Spitex Chur, which has 600 customers and 150 employees, making it the largest organization providing home nursing services in the canton of Graubünden. "We expanded our retirement provision solution around two years ago, partly to remain attractive as an employer," explains Daniel Jörg, Managing Director at Spitex Chur. Jörg took action in various ways: The entire salary is insured – there is no coordination deduction – and savings contributions are 1 percent above the statutory minimum. In addition, Spitex Chur offers its employees an optional savings plan. Every company has the opportunity to encourage its employees to save extra amounts. Spitex Chur staff can choose which savings plan is the ideal fit for their situation in life. They have the option of increasing their own savings contribution by 0.5 or 1.0 percentage points. An optional savings plan allows employees to pay more into their pension fund and so actively shape their occupational retirement provision. "The response to this opportunity to make a choice has been very positive," explains Daniel Jörg. "A good third of employees have already opted for an increased savings plan."

There are wide-ranging opportunities for customization in occupational retirement provision, so it is worth regularly reviewing your pension fund solution. With smart retirement provision solutions, companies can not only stand out from the competition, but also score points as a responsible employer and make an important contribution toward adequate retirement provision for their employees.