Entrepreneurs need to get national insurance for themselves and any employees. Presentation of obligations associated with the second pillar: pension fund (OP).
Company pension funds must guarantee a continuation of the habitual standard of living. The Federal Law on Occupational Pension Schemes and the relevant Old-Age, Survivors' and Invalidity Benefits (OP) applies: this provides for mandatory insurance for all employees, against risks of disability and death from 1 January following the date on which they reached the age of 17 years, and against old age from 1 January following the date on which they reached the age of 24. Currently, a minimum annual salary of CHF 22,050 (2023) constitutes the prior condition. The maximum income subject to insurance is CHF 88,200 (2023), but the company can set the bar higher.
OP contributions are firstly, financed by salary contributions. The employer’s contribution should be at least equal to the sum of the contributions of all its employees. Some employers voluntarily pay higher contributions. Employer and employee contributions are fixed in the pension fund regulations for each pension fund body. They are normally set on a scale depending on the age of the contributor. Contributions finance old-age credits for future old-age annuities and insurance against the risks of death and disability. Every year, employees receive information on benefit entitlements, coordinated salary, contribution rate, retirement savings capital and the statutory termination benefit (vested benefits).
Foundations, cooperative or institutions under public law, controlled by the cantonal and federal supervisory authorities, can be the legal support for the pension fund. Small companies are advised to join a collective foundation or an institution of associations. Before making their choice, the founder must compare costs, benefits and expenses for the administration. Sometimes, the differences can be considerable.