Swiss Law

• Requires participation in a fund for all employees aged 18-65 earning more than 24360 CHF/year.
• Mandatory LPP (Loi sur la Prévention Professionnelle) funds cover incomes of up to 83’520 CHF/year and equal contributions by employee and employer with fixed tiered rates. Pensions are based on accumulated reserves converted at a fixed conversion rate set by the government.
• A minimum pension of 1250 CHF./year is guaranteed and maximum pension covered is 20367 CHF/year. . Pensions over this threshold are not guaranteed by law or subject to indexed adjustments.
• Defined benefit funds (providing pensions based on a percentage of revenue) and all other funds that provide coverage in excess of LPP limits are freed from any LPP constraints except for ensuring sufficient coverage of future liabilities.
• Minimum pensions are indexed on AVS increases, decided every 2-3 years. 2013 amount is 10.- CHF/month
• Under Swiss law, the founder (DISA) of the fund has only the obligation to contribute according to the rules of the fund. The fund itself has the obligation to ensure appropriate coverage by requiring obligatory contributions from the founder and its participants and for ensuring investment revenues in a safe and sound manner. It is also responsible to create reserves for poor investment results and for life expectancy creep.
• In the case of consistent under-coverage the fund has to obtain remedial action from the founder, the participants and, to the extent possible, from beneficiaries. In the last resort, the fund can default and the only guarantee available is the LPP pension.