Various factors contribute towards retaining important employees within the company, such as an appropriate salary, a good working climate and an interesting job. However, good occupational provisions also enhance your attractiveness as an employer.
Retaining talented and skilled employees is a fundamental requirement for businesses – particularly when they occupy management or key positions. Various factors contribute towards strong employee retention, including the working climate and corporate culture, good conditions of employment, development opportunities and flexibility. However, a company is also constantly exposed to comparison with the competition and ought to remain mindful of benchmarking to remain attractive for its employees. Good occupational provisions serve to show that you as entrepreneur assume your social responsibility and provide for your employees. Various options are open to you here.
BVG contributions
The law requires you as employer to pay in at least the same amount to the pension fund as your employees. However, you are free to assume a higher contribution provided to the employees as a fringe benefit. A third of SMEs makes use of this opportunity.
Management insurance
Excellent managers and experts are vital for corporate success. These “key employees” form the company’s backbone and are hard to replace. Those capable of positioning themselves in the market as an attractive employer enjoy a competitive advantage in the struggle against the shortage of skills. Occupational provisions offer entrepreneurs strong arguments via management insurance to attract the crème de la crème, for those with high incomes also wish to be well insured. However, although you as entrepreneur are obliged to insure your employees earning in excess of CHF 21 330 per year against the risks of death, disability and old age, this obligation only applies to salaries and salary components up to CHF 85 320. Everything exceeding this has to be insured voluntarily and additionally (so-called supplementary benefits). And it’s worth doing this as without additional insurance of the income exceeding this amount, your management and you yourself will be massively worse off in old age than during your working lives, with a funding gap of 40 percent and more.
The prerequisite for supplementary insurance is that the conditions for a whole management level are based on standard, objective criteria. It can be particularly attractive for members of management to make voluntary higher savings contributions. You can establish up to three different optional savings plans for this in your employee benefits unit. Your management will then have the opportunity, for instance, of contributing 12, 14 or even 16 percent of their insured salary with tax advantages to the pension fund and at the same time improving their retirement benefits.
Selection of pension fund
Both the possible pension models and the benefits of the different pension funds vary greatly. Although full insurance generally entails somewhat higher administrative costs, you (and your employees) will be erring on the safe side as there will never be a shortfall and your employees will not under any circumstances be required to make restructuring contributions. Your advisor would be happy to explain to you the advantages of the different models in a personal consultation to facilitate your choice.
In the case of semi-autonomous pension solutions, the pension fund bears the investment risks itself – but also the investment opportunities. If financial market developments are positive, insured persons can benefit from a higher interest rate on retirement savings and thus expect a higher retirement pension. In good investment years, a portion of the profit also flows into a reserve used to compensate for years with insufficient financial market gains. A shortfall (cover ratio below 100%) and the associated restructuring measures cannot be ruled out, but are considered an exceptional scenario.
Flexible retirement
Flexible solutions regarding retirement are also attractive for employees. This applies on the one hand to the opportunities offered by you as employer for early retirement, partial retirement and postponement of retirement, while at the same time the provisions of the pension funds regarding the withdrawal of retirement savings vary in their flexibility: according to the law, insured persons are allowed to withdraw at least 25 percent as a lump sum. However, many funds go further or even allow the entire savings to be withdrawn.
