SR Technics Switzerland pension scheme
SR Technics Switzerland pension scheme – securing your future.
Insurance supported by three pillars
In Switzerland, pension provision is based on a 3-pillar system: AHV/IV, employers’ pension schemes and private pension plans. This is to ensure that members or their survivors can maintain their standard of living in old age, in the case of disability or in the event of death.
AHV/IV cornerstone (1st pillar) AHV (old age and survivors’ insurance) covers the basic needs of members or their survivors in old age and in the event of death. IV (disability insurance) secures basic needs in the case of disability via reintegration measures or benefits. AHV/IV is a mandatory insurance for anyone living or working in Switzerland.
Customary standard of living thanks to occupational pension insurance (2nd pillar) Together with AHV/IV, occupational pension schemes ensure that members can maintain the standard of living they are accustomed to when a benefit claim arises. The Pension Fund of SR Technics Switzerland provide benefits within the framework of the 2nd pillar.
Private pension plans (3rd pillar) The 3rd pillar serves to fulfil individual aspirations. Members are free to choose their supplier and the amount of their savings contributions. Limits apply to the tax-deductible 3a pillar and lump-sum benefits can be drawn in exceptional cases only. No limits or requirements apply to the 3b pillar and members are free to dispose of their invested funds at any time.
Conditions: Retirement assets can be used to acquire owner-occupied property up to three years before reaching the statutory retirement age. An advance withdrawal may only be claimed every five years. In the case of continued insurance pursuant to Art. 47a BVG, special regulations pursuant to the Pension Regulations of the Pension Fund of SR Technics apply.
Advance withdrawal: Up to age 50, the entire retirement assets may be withdrawn. Thereafter, members may withdraw no more than half of the effectively accrued capital and no less than the amount of their retirement assets accrued at age 50. Effects: Advance withdrawals reduce the risk and retirement benefits. Withdrawals can be repaid. The minimum amount of a respective buy-in is CHF 10,000.
Pledging: Instead of an advance withdrawal, the retirement assets may also be pledged to a bank. Since such pledges do not withdraw any money from the pension fund, the full benefits remain insured.
Members must notify the HR department of the birth of a child. The HR department will pass on the information to the pension fund. The fact that members have children is not relevant in the pension fund context until a claim arises (e.g. orphan’s pension).
Voluntary buy-ins: On prior request, active members may make deposits into the pension fund at any time to increase their risk and retirement benefits as long as the maximum pos-sible retirement assets exceed the existing retirement assets. Exception: As a rule, advance withdrawals for residential property must be repaid first, exceptions pursuant to the Pension Regulations.
Buy-in potential: The buy-in limits are calculated by the pension fund.
Withdrawal of buy-ins: After having made buy-ins, members may not draw such amounts in the form of lump-sum payments for the subsequent three years. According to a decision handed down by the Federal Court in 2010, this also applies to the retirement assets ac-crued before the buy-in. This rule has been adopted to prevent any temporary transfers of assets for tax reasons. In terms of pension law, the retirement assets accrued before the buy-in can still be drawn during the three-year blocking period. However, it is likely that the tax authorities will not accept the lump-sum payment.
Supplementary account for early retirement: In the case of early retirement, members can make up the reduced benefits by making deposits onto a supplementary account. Such de-posits cannot be made until the regular buy-in potential has been exhausted.
Tax effects: Members are responsible for clarifying and bearing the tax effects of their buy-ins and any lump-sum payments.
Members must notify the HR department of SR Technics Switzerland of any changes in address. The HR department will pass on the information to the pension fund.
The HR department will notify the pension fund directly of any changes in salary. The pension fund will include the new figures in the pension benefit calculations.
Members whose employment ends on their 55th birthday due to the termination of their employment by the employer and who therefore are no longer subject to mandatory insurance may remain insured if they submit their request for continued insurance in writing before termination of their employment, providing written evidence that the employment has been terminated by the employer and the insured person continues to be subject to AHV.
The terms applying to continued insurance are set out in the appendix of the Pension Regulations of the Pension Fund of SR Technics Switzerland. Members may exclusively opt for continuation of their risk insurance or, additionally, for the further accrual of their savings contributions (incl. risk insurance). In both cases, the employer’s and employee’s contributions are borne by the member.
In the event of a member’s death, the pension fund pays death benefits to the survivors (spouse’s/partner’s pension, orphan’s pension, lump-sum settlement), provided the requirements under the Pension Regulations are met.
Spouse’s pension: On principle, the amount of the annual spouse’s pension amounts to
- 60% of the insured disability pension if the deceased spouse was an active member at the time of death;
- 60% of the current disability or retirement pension if the spouse was disabled or retired at the time of death.
Upon written request by the beneficiary, the spouse’s pension resulting from the death of an active member may be paid in the form of a one-time lump-sum settlement. Beneficiaries have a period of three months to opt for a lump-sum settlement. They may also draw a part of their benefits as lump-sum capital and the other part as a pension.
Partner’s pension: Applications for partner’s pensions must be submitted within six months of the member’s death. The amount of the partner’s pension is equal to that of the spouse’s pension.
Orphan’s pension: Each child that qualifies for a pension is entitled to an orphan’s pension.
Lump-sum settlement: If no beneficiary is entitled to a spouse’s or partner’s pension in the event of an active, disabled or retired member’s death, a lump-sum settlement is due. The beneficiaries are specified in the Pension Regulations. By written declaration made during their lifetime, members may change the order of the beneficiaries under the Pension Regulations within the individual categories and/or determine the unequal distribution of the lump-sum settlement among several beneficiaries in the same category.
Disbursement: Survivors’ benefits will be disbursed as soon as the pension fund has received the required documents, such as the list of heirs, children’s birth certificates or proof of fulltime education.
Vested benefit: On leaving the company, members who leave the pension fund before a benefit claim arises are entitled to their vested benefits, which consist of the retirement as-sets accumulated from BVG age 25, excluding risk and administrative contributions.
New employer: The vested benefit will be transferred to the new employer’s pension fund. For this purpose, the pension fund will contact the member for information regarding the transfer of the money.
No new employer: The vested benefit will be transferred to a vested benefit account or used to establish a vested benefit policy. For this purpose, the pension fund will contact the member for information about the option they choose.
External membership: Insurance may continue with the consent of the pension fund if the following requirements are met: a. the member is employed by a HNA group company, or b. the termination was not voluntary, the member has completed the 55th year of age, has no new employer and is not subject to mandatory insurance (these requirements shall be met jointly). In the case of external membership, the employer is not subject to any contri-butions. When choosing voluntary external membership, members may opt for premium-free continued insurance or for continued contribution payments to further accrue their re-tirement assets. The Pension Fund of SR Technics allow members to opt for voluntary external membership.
Cash payment: Members may request a cash payment of their vested benefits if
- they are taking up self-employment and are therefore no longer subject to mandatory oc-cupational pension provision;
- they are leaving the economic territory of Switzerland or Liechtenstein on a permanent basis;
- the amount of the vested benefits is smaller than the member’s annual contribution upon termination of employment. Where members remain subject to mandatory social insurance after they move to a EU country, only the supplementary portion can be drawn in cash. The mandatory portion will be transferred to a vested benefit account or a vested benefit policy in Switzerland or Liechtenstein. For this purpose, the pension fund will contact the member for information regarding the transfer of the money.
Entitlement: All members who have a disability degree of at least 40% pursuant to the Federal Disability Insurance (IV) qualify for disability benefits. Members must have been insured with the Pension Fund of SR Technics Switzerland upon commencement of the incapacity for work whose cause led to the disability. The disability pension paid by the pension fund shall not be paid out as long as the member receives salary payments or salary replacement benefits, provided the salary replacement benefits correspond to a minimum of 80% of the salary and at least 50% thereof is financed by the employer.
Amount of the pension: The amount depends on the IV disability degree and the pension level in percent of the full disability pension specified by the pension fund. The amount of the full disability pension is equal to the projected retirement assets multiplied by the conversion rate applicable at the statutory retirement age. The projected retirement assets correspond to the retirement assets available upon recognition of disability, increased by the retirement credits determined on the basis of the last contributable salary, using an interest rate of 1.5% for the projection.
Distribution: The retirement assets accrued by both spouses during their marriage are divided into two equal halves as a matter of principle. The same applies to dissolutions of registered partnerships.
Procedure: On request, the pension fund will issue a feasibility declaration to the member. This declaration specifies the member’s financial pension situation before the divorce. As a next step, the court automatically forwards the divorce decree to the pension fund on the basis of this declaration. The court notifies the pension fund of the amount of the spouse’s entitlement to vested benefits. The pension fund then transfers this amount to a vested benefit account or to the spouse’s employee benefits institution. The pension fund will exclusively execute final divorce decrees issued by Swiss courts.
Renewed buy-ins: Active members and partially disabled persons can principally compensate for the amounts transferred to their spouse upon divorce by making voluntary buy-ins into the pension fund.
Admission: Membership with the pension fund begins upon commencement of employment, however no earlier than on 1 January following the 17th birthday and at the time the AHV salary exceeds the BVG minimum salary. Principally, all employees with an unlimited employment contract are insured. Employees whose employment contract is limited to a maximum of three months are not admitted. If the employment contract is extended beyond the duration of three months, the employee is insured from the date on which the extension was agreed. If several consecutive employment periods with the employer last longer than three months in total and if no interruption exceeds three months, the employee is insured from the fourth month of employment.
Scope: Until 31 December of the year of the member’s 24th birthday, insurance is limited exclusively to the risks of disability and death, thereafter it also comprises old age.
Contributions: Every year, members can choose between three contribution plans, Standard, Comfort and Super, to determine the amount of their employee contributions.
Members must submit the designation of their life partner in written form to the pension fund during their lifetime to ensure that any survivors’ benefits can be paid to the partner in the event of the member’s death. The designation of the life partner must be made in a unilateral written declaration including a notarised signature or a contract between both life partners that includes the member’s notarised signature.
Members must notify the HR department of their marriage or registration of a same-sex partnership. The HR department will pass on the information to the pension fund. Members living in registered partnerships have the same status as married members and hold the same rights and duties under the Pension Regulations.
Statutory retirement age: 64 for women, 65 for men.
Early retirement: Not before age 58. Early retirement results in lower pensions.
Partial retirement: Partial retirement is possible in consultation with the employer.
Retirement benefits: Retirement assets can be drawn as a pension or as a lump-sum retirement benefit. Combinations of both are also possible. Once the lump-sum benefit has been drawn, all claims against the pension fund are satisfied. Members must notify the pension fund of their intention to draw a lump-sum benefit at least one month before retirement. In the case of continued insurance pursuant to Art. 47a BVG, special regulations pursuant to the Pension Regulations of the Pension Fund of SR Technics Switzerland apply.
Calculation of the retirement pension: Retirement pensions are calculated at the time of retirement on the basis of the accrued retirement assets and the conversion rate.
Effective salary – Pension Fund: The effective salary is used to determine the insured salary.
The effective salary is equal to 12 times the monthly AHV salary less a coordination deduction, if applic¬able. It may not exceed the salary subject to the AHV. The salary components which are not included in the calculation of the effective salary are specified in the Pension Regulations. The entry threshold amounts to 6⁄8 of the maximum AHV retirement pension and corresponds to the BVG entry threshold. The maximum effective salary amounts to is limited to 10 times the upper BVG threshold.
Coordination deduction – Pension Fund: For “GAV” and “temporary” employees, the maximum coordination deduction corresponds to 50% of the maximum AHV retirement pension. For members with a part-time employment contract, the coordination deduction is not adjusted to the level of employment. For “specialist” and “executive” employees, there is no coordination deduction.
Insured salary – Pension Fund: The minimum contributable salary amounts to 1⁄8 of the maximum AHV retirement pension. For “GAV” and “temporary” employees, the maximum contributable salary amountsto 10 times the upper BVG threshold minus the coordination deduction. For “specialist” and “executive” employees, the maximum contributable salary amounts to to 10 times the upper BVG threshold.
For members on temporary contracts (monthly or hourly wage), the effective salary is calculated as specified in the Pension Regulations.