Switzerland Pension provision
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Purchasing pension benefits: fill gaps and save taxes
Voluntarily purchasing pension benefits is ideal for saving taxes. Manuela Meier-Gloor, a financial planner from Zug, explains what you should consider.
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Pillar 3a – Maximum Amounts for 2019
Old Age and Survivors' Insurance (AHV) and employee benefits insurance (BVG) only cover 60 to 70 percent of the previous household income after retirement. Those who do not want to give up their accustomed standard of living in their old age should therefore contribute to Pillar 3a every year.
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Swiss retirement provision: grand disillusions
Old Age and Survivors' Insurance (AHV) is Switzerland's problem child, as found by Credit Suisse's 2018 Worry Barometer. Even the planned reforms for the retirement provision (AHV 21) are inadequate – the country should and must aim for a master stroke.
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Handelszeitung: Major Comparison of Pillar 3a Securities
Credit Suisse has been rated as "good" in the Handelszeitung's major comparison of Pillar 3a securities. The CSA Mixta-BVG Basic investment group was one of the products to top the ratings. This is the fourth year in a row that Credit Suisse has come out on top.
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AHV contributions: How much do employers, employees, and self-employed people pay?
For employees, the employer pays half of the AHV contributions. Self-employed people have to dig deeper into their pockets, since they have to pay the full contributions themselves. How high are the different salary deductions?
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AHV Contributions: How much do people who are not part of the workforce pay?
Even people who are not part of the workforce have to pay AHV contributions from 1st January after reaching the age of 20 until they reach the normal retirement age. But how are the AHV contributions determined and who is not considered to be part of the workforce? We show how the AHV contributions are calculated for people who are not part of the workforce and what the minimum and maximum contributions are. A calculation example is provided below for illustrative purposes.
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Demographic Change Is Causing Issues for Retirement Pensions
Today, too many retirees need to be financed by too few actively employed workers. This means that the intergenerational contract and retirement provision must be adjusted to suit the conditions of modern society.
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"1e" Pension Plans in the Second Pillar Are Becoming More Attractive
An amendment to the Federal Act on Vesting in Pension Plans may push "1e" pension plans of pension funds. The National Council and the Council of States have decided on an amendment to the law, which comes with more responsibility and additional investment opportunities for the insured.
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No universal pension-provision solution
Any wealth planning process should start with an analysis of the overall asset picture. People's attention is currently focused on employee benefits insurance. According to the Credit Suisse Worry Barometer, 44% of Swiss voters consider retirement provision their main concern, making it society's primary issue. The origins of these concerns are widely known.
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What is the conversion rate?
The conversion rate is used to calculate the annual BVG pension from the available retirement capital. Anyone who wants to find out what pension is realistic after retirement must know three things about the 2nd pillar:
1. The conversion rate for the mandatory portion of pension fund assets is currently 6.8%.
2. However, most pension funds use a lower conversion rate in their calculations because they combine it with the rate for extra-mandatory insurance.
3. Conversion rates will be lowered in the foreseeable future because they are too high at the moment.
