Legal News February 2011
Dear clients and business friends
In the Legal News issue of December 2010 we discussed some of the fundamental new changes to Swiss procedural law.
In addition to these big changes, the rules governing the occupational pension system have undergone numerous
amendments. The statutory basis underlying the occupational pension system is the Federal Act on Occupational Old Age,
Survivors' and Disability Insurance (BVG). Additional provisions can be found in other statutory acts, such as in the
Code of Obligations (CO), Federal Act on Vesting in Pension Funds (FZG) or the Code of Civil Procedure (CCP).
The BVG is a framework law which predominantly sets out minimum standards in the area of occupational pension
schemes. For this reason, pension funds are free within the legal frames of BVG how to structure their benefits, how
to finance themselves and how to organise. Every pension fund is required to set out regulations containing provisions
applicable to its insured members, governing such issues as benefits, organisation, administration, financing and
oversight. For this reason, most of the changes to the BVG are to be incorporated by the pension funds into their
respective regulations, in order for these changes to apply to their insured members.
Attorney-at-law, Partner, Legal Services
Most important changes in the occupational pension system (BVG) since 1 January 2011
Helga Mesaros, Attorney-at-law, Manager, Legal Services, firstname.lastname@example.org
Print version (PDF 157 kB)
The occupational pension system, which is primarily subject to the provisions contained in the BVG and its implementing
ordinances (BVV) 1, 2 and 3, experienced a number of changes per 1 January 2011. These are summarised in brief below.
2. Measures for older employees (Art. 33 a and b BVG)
Measures to facilitate participation in the labour market by older employees were adopted by parliament on 11 December 2009
as part of broader structural reforms, and came into force on 1 January 2011. They contain the following changes: (1) Those
insured under the BVG who are at least 58 years old may, upon request, maintain their previous insured salary despite a
reduction in salary of up to a maximum of 50% (and the corresponding decrease in the work load). (2) In addition to this, insured
members who, despite having reached the ordinary retirement age (currently 64 for women, 65 for men), wish to continue working
may continue to pay BVG contributions to their pension fund up until the age of 70. In order for insured members to be able to
avail themselves of these changes, their pension funds must incorporate corresponding rules into their respective
3. Purchase of pension assets by persons who move to Switzerland from abroad (Art. 60b BVV2)
For persons who have never been members of a Swiss pension fund, transferring pension assets amassed abroad into a Swiss
pension fund can prove problematic. The Swiss authorities view a direct transfer from abroad into a Swiss pension fund as a
voluntary buy-in. The amended Art. 60b BVV 2 facilitates the transfer of pension assets from abroad to Switzerland, in that the
limit previously in place, which capped the maximum allowable buy-in, can now be ignored where (1) a direct transfer takes
place from a foreign-based scheme to the Swiss pension fund; and (2) the Swiss pension fund allows such transfers; and
(3) no tax deduction is made in Switzerland.
In this way, Swiss pension funds are free, as of 1 January 2011, to decide whether or not they wish to accept
foreign pension assets which may be transferred to Switzerland under foreign law, up to the maximum permitted buy-in amount
as stipulated under the applicable pension fund regulations.
The rules set out under Art. 60b BVV 2 only apply to transfers from abroad to Switzerland. For transfers abroad from
Switzerland, the cash payout rules contained in the FZG apply. In addition, clarification is required as to whether the
foreign pension fund is authorised and willing to accept the pension fund benefits paid out.
4. Partition of occupational pension scheme assets in the event of divorce or dissolution of a registered
partnership (Art. 280et seq. CCP)
The articles concerning occupational pension schemes in the event of divorce or dissolution of a registered partnership under
the Civil Code and the Act on Same Sex Partnerships have been repealed upon the entry into force of the Federal CCP. Today,
the corresponding rules are set forth in the CCP. Where the spouses have reached consensus on partition of pension assets,
Art. 280 CCP is applicable, which from a conceptual standpoint resembles old Art. 141 of the Civil Code. The spouses
must have reached consensus on partition and the execution thereof, the pension funds concerned must have confirmed the amount
of the assets on hand as well as the practicability of the agreed partition plan, and the court must be convinced that the
agreement reached by the spouses complies with the law. Where the spouses are unable to reach consensus on partition, the court
which decides on their divorce has sole jurisdiction to decide with regard to the partition of occupational pension scheme
assets (Art. 281 CCP). In order to ensure that the decision reached by the court can also be executed by the pension funds,
the court which has jurisdiction over divorce proceedings is required ex officio to obtain declarations from the pension funds
concerned, confirming that the partition imposed by it can be carried out in reality.
5. New thresholds
The threshold amounts, which serve to determine the minimum salary after which one is required by law to join an occupational
pension scheme, were adjusted by the Federal Council last autumn, and these changes also came into force per 1 January 2011.
The lower and upper thresholds for the so-called coordinated salary correspond to the insured salary pursuant to obligatory
membership of an occupational pension scheme. The new minimum annual salary threshold is thus CHF 20,880 (was previously
CHF 20,520), the coordination deduction is CHF 24,360 (was previously CHF 23,940), the upper annual salary threshold
is CHF 83,520 (was previously CHF 82,080), the maximum coordinated salary is CHF 59,160 (was previously CHF 58,140)
and the minimum coordinated salary is CHF 3,480 (was previously CHF 3,420).
6. Adjustments to survivors' and disability pensions
Art. 36 BVG requires that survivors' and disability pensions which fall within the obligatory thresholds are to be adjusted
periodically on the basis of the consumer price index (CPI), until the ordinary retirement age is reached. Insured persons, who
started receiving their pensions between 1985 and 2005, do not receive any such adjustment. These pensions were already adjusted
per 1 January 2009. The CPI level at the time was higher than is the case today, which is why no such adjustment is
due. Insured persons whose pensions began being paid out in 2006 receive an increase of 0.3%. Those first entitled to a pension
as of 2007 receive an adjustment to their pensions of 2.3%. However, for pensions which exceed the minimum set forth in the
BVG, adjustments for inflation are not mandatory. The parity board of the pension fund in question has the competency to decide
with regard to any possible adjustments. Any possible adjustments for inflation due to current old-age pensions are also a matter
for the pension fund's parity board. The decisions of the parity board are to be described in the annual financial statement or
in the annual report.
7. Other changes
The list of changes discussed above is not intended to be exhaustive. There are other changes – which have not been broached
here – in the area of the Federal Act on Vesting in Pension Funds and its implementing ordinances, as well as in the area of tied
pension provision under pillar 3a and in other areas.
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Note: The Legal News provides an overview of new legal developments. The content does not represent any legal advice.