Just drop out for a while, take a break and decide for yourself how to spend your time. Sabbaticals are trendy, with psychologists even prescribing them as a way to ease the stress of everyday life. And ever more companies are offering their employees a time out from their job. But that's no reason to forget future provisions.
There are many reasons for a professional time out: at the top of the list is surely the wish to break free from everyday life and explore the world – whether with a trip around the globe, a language course or a year volunteering abroad. And then there are also further training courses, also very popular during sabbaticals. Many people also use their time out to think over their personal and professional future in peace. In such cases, the main motivating force is the desire for self-determination.
It’s easy to ensure future provisions
If you’re planning a sabbatical you should take an active interest in your provisions, since they may have an effect on your financial security later on. If the time out from your job lasts less than a month, you will continue to be legally insured under AHV and thus protected against risks such as disability and death as a result of illness or accident. Occupational provisions (2nd pillar) also remain unaltered in effect. If the break lasts longer, the benefits you receive depend on your particular pension fund: at best they will continue for 24 months, at worst for just six.
The following must be borne in mind when it comes to future provisions:
- It is important to review your pension situation. Your employer or pension fund can help with anything that is unclear.
- You should make private provision for the period during which you are not covered by the 2nd pillar. As soon as you go back to work you can close the gap in coverage, for instance with a buy-in to the 2nd pillar.
- If coverage for disability or death is cancelled, the risks can be covered with private insurance.
- Those who spend a whole year or longer abroad will be liable for the annual minimum AHV contribution of CHF 480. Missed deposits can be made up to five years retroactively.
- If you decide to quit your job, you should deposit your retirement savings in a vested benefits account at an insurance company or bank.
Properly covered in case of illness or accident
As long as you are registered in Switzerland, you are obliged to have mandatory basic health insurance through your health insurer. Outside Switzerland, your mandatory basic health insurance pays up to twice as much as the same treatment would cost in Switzerland. In countries with very elevated health costs, therefore, such as the US, caution is advised, and it is accordingly important to take your protection into your own hands, in self-determination, in case of illness or accident.
Take care of the following to ensure peace of mind on your sabbatical:
- The first thing to do is review insurance cover in the event of illness or accident abroad.
- If the time out lasts longer than six months, separate accident insurance is recommended. Alternatively, such eventualities can also be covered with a supplement to your health insurance.
- If you remain in employment, you should arrange a negotiated insurance arrangement, typically by way of your employer’s accident insurer.
- If you resign, you should have a private short-term disability benefit insurance from a health insurer. This will afford you optimal protection in the event of a protracted illness.
What is a sabbatical?
A sabbatical is a working model whereby an employee takes a professional time out of between three weeks and 12 months. The aim is to recharge batteries, fulfil a dream and make one’s own ideas a reality. Sabbaticals are less common at smaller companies, since it is difficult to replace employees at such enterprises. Larger Swiss companies – such as Swiss Life – are more and more frequently offering employees a sabbatical as a supplementary benefit. The term “sabbatical”, by the way, is derived from the Biblical notion of the seventh or fallow year.