Vita - Occupational retirement provision for companies

The Vita Collective Foundations work closely with Zurich to provide you with the best possible occupational retirement provision. While the collective foundations are responsible for investing the pension savings in the best interests of the insured, Zurich is responsible for risk insurance, customer and benefit services and servicing.

Fair play is the top priority: we pursue a sustainable and transparent investment strategy in order to accumulate the highest possible retirement savings capital for our insured persons. At the same time, we strive to minimize unintentional redistribution from active insured persons to beneficiaries.

Since companies’ needs differ greatly regarding their occupational retirement provision, Vita offers four different retirement provision solutions. During the needs assessment, we determine together which solution best suits your company in terms of employee structure, risk benefits, investment strategy and degree of self-determination.

You can find out more about our retirement provision solutions by phone (0800 80 80 80), email (bvg@vita.ch) or in a personal meeting.

Links

www.vita.ch – Find an advisor

The fact that we offer four different retirement provision solutions is due to the different needs of our customers. Which of the four products best suits your company depends, among other things, on the structure of your employees, their risk tolerance and the desired degree of self-determination.

Vita Classic, our most widely used offering and one of the largest semi-autonomous collective foundations in Switzerland, offers companies of all sizes and structures a flexible, needs-based and comprehensive retirement provision solution. The investments are diversified, sustainable and efficient. Investment income, including any additional income, is distributed automatically and fairly to the insured. The level of risk benefits and savings credits can be adjusted to your company's current situation at any time.

With Vita Invest, the retirement provision assets of the affiliated company are invested at all times to match its structure and strength. In addition, each company receives its own balance sheet and income statement, as with a proprietary pension fund. This prevents redistribution from the active insured to pensioners as well as to other companies, and the capital generated benefits your employees in full. During retirement, the capital is invested in a balanced manner, and the earnings are paid out as an annuity bonus in addition to the fixed pension. Vita Invest is suitable both for basic provision and as a supplement as part of a purely supplementary retirement provision.

Vita Relax pares occupational retirement provision down to the essentials. This offer is primarily intended for start-ups and SMEs with a great need for security. The investments are 100% reinsured by Zurich and there is a fixed guaranteed interest rate and profit sharing.

Vita Plus is a supplement to the mandatory retirement provision that allows you to insure death and disability benefits as well as retirement savings capital with a full capital guarantee. Vita Plus is ideal if you want to offer your management employees an additional incentive.

With Vita Select, the insured persons determine the investment strategy and the amount of the individual savings contributions themselves, both of which they can adapt to their life situations. Vita Select is the right choice if you want to offer your management employees more attractive conditions and greater self-determination in their retirement provision.

Downloads

• Vita Classic factsheet
• Vita Invest factsheet
• Vita Relax factsheets
• Vita Plus factsheet
• Vita Select factsheet

For newly established companies, we recommend Vita Relax or Vita Classic, depending on your needs.

Vita Relax allows you to adopt a cautious approach and pares occupational retirement provision down to the essentials. This retirement provision solution is intended for companies with a great need for security. The investments are 100% reinsured by Zurich and there is a fixed guaranteed interest rate as well as profit sharing.

With our most popular retirement provision solution, Vita Classic, you can flexibly structure risk benefits and savings credits and adapt them to your company's situation at any time. The retirement provision assets are broadly diversified and sustainably and efficiently invested, which is reflected in a higher than expected interest rate.

Thanks to the Vita Company Portal, you can handle most of the administration for both products digitally. You have access to all data via the online tool and can make all kinds of changes yourself.

If you have any questions, our experts are also available by phone (0800 80 80 80) or email. 

Links

• Mail: bvg@zurich.ch
• www.zurichbusinessinsurance.ch - Offers

Achieving good returns and distributing sustainable interest for the insured is a fundamental goal of Vita Collective Foundations. At the same time, it is particularly important in the case of retirement provision that assets are invested safely. How high the return potential of an investment is depends primarily on the equity ratio.

With our standard Vita Classic solution, the equity ratio is 30%. If you wish to have a higher share of equity, you have two options. The Vita Invest retirement provision solution allows an equity ratio of up to 50% – if your company has the necessary risk capacity. With Vita Select, employees with an annual salary of CHF 129,060 or more can determine the investment strategy themselves; the maximum possible equity ratio is 65%.

The Vita Invest and Vita Select retirement provision solutions are available if you wish to determine the investment strategy for the retirement provision assets in the super-mandatory area yourself. With Vita Invest, you can choose between the three investment profiles – "dynamic," "progressive" and "balanced" – based on your company's risk capacity. With Vita Select, on the other hand, each insured person can decide for themselves which of the eight available strategies will be used to invest their retirement provision assets for salary components above CHF 130,000 per year.

The idea behind occupational retirement provision is that all insured persons save for themselves and build up their own retirement assets, which are then used to finance their later retirement benefits. However, over recent decades, the framework conditions have changed fundamentally. Life expectancy has risen sharply, meaning that a retired person’s retirement savings capital has to last longer and longer. In addition, the number of pensioners compared to active insured is also increasing. Interest rates, on the other hand, have fallen. The current conversion rates are too high, because they assume a shorter life expectancy. This creates a funding gap. In order to plug this gap, today's working population will have to forgo part of the returns on their retirement savings capital for the benefit of those claiming a pension – this leads to unintentional redistribution from active insured persons to pension beneficiaries.

This unintentional redistribution is a fundamental problem of occupational retirement provision, and even those insured by the Vita Collective Foundations are not completely protected from this. To keep redistribution as low as possible, we use a fair, flexible process and regularly alter the guaranteed minimum interest rate in line with market conditions.

Vita Invest offers an opportunity to avoid this cross-financing entirely. With this solution, you set up your own pension scheme with its own balance sheet and accounting – and your employees'  retirement provision assets are managed independently of the overall collective. By joining Vita Invest, companies benefit from having their own pension fund while at the same time outsourcing risks and implementation tasks.

Further information

• www.vita.ch - Fair Play
• www.vita.ch - Fairness rather than redistribution in the second pillar – Part 1: Fairness – what does it mean?

With the Vita Collective Foundations, they can conveniently administer their occupational retirement provision via the Internet. We call this the Vita Company Portal. The online tool provides access to contracts, personal data, retirement provision strategies, account statements, the cost/benefits statement of your retirement provision solution and a status overview. You can also use the Vita Company Portal to make changes to personnel (entry, exit, retirement, in the event of death, inability to work or salary changes) and your company. You can also enter your annual salary registrations online.

To use the online employee pension plan, you need a personal login that you can request on our website.

Vita Company Portal for Vita Relax, Classic & Plus

• To the login
• To registration

If you have any questions regarding usage or technical problems, we can provide you with information by phone (+41 44 628 40 40) or email (ewp.support@zurich.ch).

Vita Company Portal for supplementary insurance

A separate online tool is available for the Vita Invest and Vita Select retirement provision solutions.
To use it, please contact the respective customer service department.

• Vita Invest: 044 628 43 43 / vitainvest@pfs.ch
• Vita Select: 044 628 46 46 / vitaselect@pfs.ch

Zurich offers suitable solutions for the investment and risk reinsurance of proprietary pension funds with its more than 150 years of experience in these areas. While Zurich Life Insurance Company Ltd can rely on a high level of expertise in the area of risk coverage, Zurich Invest Ltd, as a wholly owned subsidiary of Zurich, manages more than CHF 22 billion in retirement provision assets in Zurich Investment Foundation, the largest bank-independent investment fund in Switzerland.

• Risk reinsurance
• Investment solutions

The abbreviation BVG stands for the Swiss Federal Law on Occupational Retirement, Survivors' and Disability Pension Plans. It contains the mandatory minimum requirements for employers with regard to occupational retirement provision. Occupational retirement provision is part of the 3-pillar system of retirement provision in Switzerland:

1. 1st pillar: State retirement provision (OASI/IV)
2. 2nd pillar: Occupational retirement provision (BVG/LAI)
3. 3rd pillar: Private retirement provision (3a and 3b)

Occupational retirement provision, together with the 1st pillar (OASI/IV), is intended to ensure the accustomed standard of living in old age, in the event of disability or death. Pillar 1 and Pillar 2 together should account for 60% of a person's final income before retirement. Depending on the individual situation and needs, it therefore makes sense for most people to make additional private provision in the 3rd pillar. 

Employers in Switzerland are obliged to insure their employees with salaries between the entry threshold and the upper limit, i.e. between CHF 22,050 and CHF 88,200, within the scope of a pension fund (as of 2024).

From the age of 18, employees with an annual salary of more than CHF 22,050 must be insured against the risks of disability and death, and from the age of 25 they are also required to save for old age. Insurance for self-employed persons is not compulsory under the BVG, but they can join voluntarily in order to benefit from the advantages of occupational retirement provision. When a person works for more than one employer simultaneously, the salaries are not added together; if the salary for one of the jobs exceeds the entry threshold, the person is insured for this job.

On retirement: On retirement, the insured person can choose whether they wish to receive a retirement pension until the end of their life or whether they wish to withdraw the accumulated capital; hybrid options are also available. If the person has children under the age of 18 or children in education, a child's pension is also paid.

In the event of death, the surviving spouse receives a widow's or widower's pension if he or she is responsible for the maintenance of at least one child at the time of the spouse's death or is older than 45 and the marriage lasted at least five years. If these conditions are not met, the surviving spouse is entitled to a one-off settlement amounting to three year's worth of annuities. Surviving children under the age of 18 and children in education up to the age of 25 also receive benefits.

In the event of loss of salary due to disability (from a degree of disability of at least 40%), the insured person receives a disability pension, and the pension fund also pays the employee contributions so that savings can continue to be made for the retirement pension. If the insured person has children under the age of 18, a disabled person's child's pension is also paid out.

The retirement assets correspond to the assets accumulated in the course of professional activity. They are used to finance pensions from the 2nd pillar. The retirement assets consist of the sum of the vested benefits paid in plus interest, the retirement credits plus interest and voluntary purchases plus interest. The retirement assets serve as the basis for calculating the subsequent retirement pension from occupational retirement provision and are made up as follows:

Retirement credits: These contributions are paid into the pension fund on a regular basis by the employer and employees. Both parties pay their share in accordance with the legal requirements and the rules of the respective pension fund.

Vested benefits: These arise when an employee changes jobs and the previously accumulated retirement assets are transferred to the new pension fund.

Voluntary purchases: In certain circumstances employees can voluntarily pay additional contributions into the pension fund and thus increase their retirement benefits. These voluntary contributions are also added to the retirement assets and can be deducted from taxes.

Interest rate: Interest is paid annually on all retirement assets. The interest rate is set by the pension funds. A statutory minimum interest rate applies to the mandatory portion of the retirement assets.

BVG contributions are regular payments into the pension fund. At least half of these contributions are paid by the employer (employer's contribution) and the rest by the employee (employee's contribution). They are deducted directly from your salary.

The BVG contributions comprise various components: Retirement credits, risk premiums and administrative costs. The retirement credits are used specifically to build up retirement assets. The risk premiums cover the risks of disability and death. Costs are also incurred for the administration of the pension fund.

The retirement credits depend on the age of the insured person and the insured salary.

At the age of 25 to 34, they amount to at least 7% of the insured salary, from 35 to 44 years 10%, from 45-54 years 15% and from 55 to 64/65 years 18% of the insured salary. 
Glossary Frage

The coordinated salary is the part of the annual salary that is required to be insured when the entry threshold is reached. It corresponds to the annual salary (up to the BVG upper salary limit) minus the coordination deduction. The coordination deduction is currently CHF 25,725 (as at 2024) and corresponds to the part of the salary that is already insured by the OASI/IV.

An illustration:

Annual salary CHF 80,000
Coordination deduction (as at 2024): CHF 25,725
Coordinated wage: CHF 54,275

The coordination deduction is a fixed amount that is deducted from the annual salary in order to calculate the salary insured under occupational retirement provision (BVG). As the occupational retirement provision is based on the state pension scheme, the coordination deduction is intended to cover the part of the salary that is already insured by the state old-age and survivors' insurance scheme (OASI).

The BVG upper salary limit is the maximum salary that must be insured as part of occupational retirement provision (BVG). Higher salaries can also be insured under non-mandatory retirement provision. The maximum insurable salary under the BVG corresponds to ten times the BVG upper salary limit.
The coordination deduction and the BVG upper salary limit depend on the OASI pension. The Federal Council sets the minimum and maximum OASI pension and adjusts it regularly to reflect current economic and social conditions.

What is the conversion rate?

The conversion rate is a percentage rate used to calculate the annual retirement pension from the accumulated retirement assets. For example, with a conversion rate of 6% and retirement assets of CHF 100,000, the annual pension is CHF 6,000, i.e. 6% of CHF 100,000. The conversion rate is influenced, among other things, by life expectancy, the current interest rate and other assumptions.

Purchases into the pension fund are voluntary additional payments of pension fund contributions to increase the retirement assets and close existing pension gaps. Purchases are possible under certain circumstances. As a rule, this is the case if a change in life circumstances has created a pension gap. Typical causes are career breaks, salary adjustments or an increase in workload. The pension fund statement shows the maximum amount that may be purchased. In the year of purchase, the capital paid in can be deducted in full from taxable income. Due to progressive taxation, it often makes sense to stagger purchases over several years. 

In principle, the retirement assets in the 2nd pillar are intended for the period after retirement. Only under certain circumstances may they be utilised early, including for the purchase, construction or renovation of owner-occupied residential property or the amortisation of mortgage debt. It is also possible to purchase shares in a housing cooperative with funds from retirement assets. The credit balance can also be drawn when starting self-employment under certain conditions. In the case of permanent emigration to a country outside the EU/EFTA, the entire balance can be withdrawn; if the emigration takes place within the EU/EFTA, only the non-mandatory portion can be withdrawn; the mandatory portion must remain in a vested benefits institution in Switzerland. The retirement assets can also be drawn under certain circumstances for early retirement from the age of 58.

At the time of normal retirement, the retirement assets are converted into a pension. The pension amount is determined by the following factors: the accumulated retirement assets, the capital yield realised on the retirement assets and the conversion rate.

Example: With retirement assets of CHF 100,000 and a BVG conversion rate of 6.8%, this results in an annual pension of CHF 6,800, i.e. around CHF 570 per month.

The BVG stipulates that the BVG retirement assets must earn interest at a minimum rate. The minimum interest rate is set by the Federal Council and is currently 1.25% (as at 2024). 

The BVG minimum interest rate has a significant influence on the amount of retirement assets at the time of retirement. A pension fund model in which the insured participate directly in the investment performance has a correspondingly positive effect on the pension amount.

The pension fund statement is issued annually by the pension fund and contains important information about occupational retirement provision, for example the current amount of retirement assets, the contributions currently paid, the insured salary and the potential for purchases. The pension fund statement also shows what pension can be expected in the event of regular or early retirement and how high the benefits would be in the event of disability or death.

Here is an example of a pension fund statement with the most important terms: Occupational benefits statement, simply explained.

Registered partners have the same status as spouses under the BVG. Registered partners have similar rights to spouses, i.e. they are also entitled to survivors' benefits, retirement pensions and vested benefits. When the partnership is dissolved, the retirement assets are divided in accordance with the statutory provisions, just as for married couples. You can read more information in our article: Marriage or cohabitation?

 

Anyone who terminates an employment relationship takes the pension assets from the 2nd pillar with them. These are usually paid into the new employer's pension fund. If there is a break between the two positions, the funds must be paid into a vested benefits account or a vested benefits custody account for the interim period. The pension assets will continue to be invested there on a tax-advantaged basis.

You can read here what happens to your termination benefit if you do nothing and whether you are entitled to pension fund benefits from previous employment relationships.

Further information and frequently asked questions can be found on our vested benefits custody account page.

A collective foundation is an occupational pension plan with which a large number of independent employers are affiliated. However, the various employers do not form a shared risk pool. Strict legal regulations apply to collective foundations. Each collective foundation is managed by a foundation council made up of equal numbers of employer and employee representatives.

Vita – the occupational benefits solution for companies from the Vita Collective Foundations and Zurich Insurance. More than 25,000 companies with around 200,000 employees rely on Vita's services.

Under the Vita brand, the Vita Collective Foundations take care of the investment of retirement assets, while Zurich handles the risk insurance and service. Vita customers benefit from the core competences of both partners: Through the Vita Collective Foundations, they participate in the investment performance that benefits the insured persons. And Zurich stands by them as a strong insurance partner that secures 

the pension payments, covers the risks and offers first-class service.

More information about Vita.ch

Investment foundations are institutions that serve the purpose of occupational retirement provision. They can be established for the joint investment and management of pension assets. It is therefore a special form of foundation in Switzerland that focuses on the professional management and investment of assets. They are intended exclusively for occupational pension plans and 3a institutions and thus for institutional investors.

With assets under management totalling more than 22 billion Swiss francs, the Zurich Investment Foundation is the largest bank-independent investment foundation in Switzerland. Since it was founded in 1999, it has offered pension plans a comprehensive range of services for investing capital effectively. The Foundation has its registered office in Zurich and is subject to supervision by the Occupational Pension Supervisory Commission (OPSC) in Bern.

More information about the Zurich Investment Foundation