More than a third of all those employed in Switzerland work part-time, mainly so they can raise their children, fulfil family obligations or pursue continuing education. Very few of them think about their future provisions, with potentially serious consequences for their old age. If they look after a couple of details, however, even part-timers can look to their financial future with confidence.
n Switzerland, 59% of women and 18% of men work part-time (source: FSO 2017) of a total of 1.7 million part-time workers. The reasons for working part-time differ by gender. For women, childcare is most common (26.5%), followed by family obligations (21.8%), while men name education and studies as their main reason (17.5%). There are, however, increasingly more men who have decided to work part-time because of childcare (6.1%) and family obligations (6.3%).
Solid arguments for working part-time
The advantages of part-time employment are clear: more time for yourself and your family, without missing the boat professionally. If you want to return to full-time work later on, it’s significantly easier to do so from a part-time position than after not working at all for several years. What is more, part-time employment means that money continues to flow into provisions, creating only a small coverage gap – as long as you work at least 60%.
This is a good option for mothers in particular, who thus enjoy a professional challenge in addition to their family – which bolsters their self-confidence and keeps their career opportunities open. They also do not become dependent on their partner, since both contribute to family income. More and more couples are now sharing responsibility for childrearing with both reducing their working hours, so that both benefit from more family time.
Implications for future provisions
Nevertheless, before deciding to work part-time there are a few things that should be considered. Reduced working hours, for instance, mean less paid into AHV and a pension fund, and consequently lower benefits in old age or in the event of disability.
If your salary is below CHF 21,150, in fact, pension fund contributions are not made at all (as at 2018), with the result that, in old age, you will receive just the minimum AHV pension, CHF 1175, not even subsistence level. In order to reach the minimum income for the pension fund, you should work at least 60 percent.
Unmarried couples have the additional disadvantage that their pension fund contributions are not shared in the event of separation, and thus the partner without an income or with a low income receives only a low pension. In such cases a common-law partnership contract is useful, to establish income relations in the event of separation.
With a few tips, you too can enjoy a secure old age even after working part-time:
Tips on provisions
- Do not reduce your working hours below 60%
- Plan a fixed monthly amount for your old age provisions
- Order an AHV statement – if it shows a gap, you can close it up to five years retroactively
- Consider making a pension fund purchase
- Make regular payments to your third pillar
- Seek advice on your future provisions
Particularly for unmarried couples
- Sign a common-law partnership contract
- Let the pension fund know that you are living in a fixed partnership
- Provide for your partner’s financial security with life insurance
Part-time employment poses many risks when it comes to future provisions. Remain aware of them and address your provisions with self-determination, however, and you need have no fears for your financial future.