Calculating pensions
Retirement pensions are calculated as follows: The retirement assets built up before retirement are multiplied by the pension conversion rate corresponding to the actual retirement age. The current pension conversion rate is specified in the Integral pension regulations.
Early retirement
Our pension regulations allow for early retirement from the age of 58 at the earliest. If you have reached the age of 58 and you have definitely decided to stop working, you are entitled to a lifelong retirement pension and/or a lump-sum payment from the Integral pension fund.
Insured people who retire early and are not yet taking their OASI pension can apply to the Integral pension fund for an OASI bridging pension. The amount of this pension is specified in the pension plan and is determined by the payments made by the employer and/or the insured person before retirement.
You can “top up” the difference between your pension when you retire early and your pension at the statutory retirement age.
Topping up
Topping up means making up the difference by paying in the required amount. This is done either by the employer or the employee. Therefore, you should ask your pension fund in Switzerland, such as Integral, whether a top-up is permitted and to what extent. The maximum possible top-up amount is determined by the age that you want to retire at.
Deferred retirement
If you want to continue working full- or part-time after the statutory retirement age and in agreement with your employer, and if you do not take a full or partial retirement pension at this point, you can go on making contributions to your occupational pension, depending on your pension plan.
If you work part-time after reaching the statutory retirement age, you are required to take partial retirement.
If you defer your retirement, your pension is calculated as follows: The retirement assets you have saved up to the time when you defer your retirement are multiplied by the pension conversion rate specified in the pension regulations for the actual retirement age.
Pensions for the children of retired people
As the recipient of a retirement pension, you are entitled to a pension from Integral for every child who could claim an orphan’s pension on your death. This children’s pension is paid from the start of your retirement pension and payments end when the child reaches the age of 18 or, if the child is in education or training, the age of 25. The pension for the children of retired people amounts to 20 percent of the retirement pension. If the retirement pension is no longer paid as a result of the recipient’s death, the children’s pension will still be paid and the amount will be the same as the orphan’s pension, provided that the relevant requirements are met.
RETIREMENT ASSETS
Retirement benefits and maturity date
The Integral retirement benefits are generally payable when you reach statutory retirement age. You can take the money in the form of a pension, a lump sum or a combination of a lump sum and a pension.
Increased or reduced retirement assets
Your retirement assets include the following: any vested pension benefits which have been transferred; retirement credits in accordance with the pension plan; repayment of early withdrawals; personal payments in the form of voluntary contributions; voluntary purchase of benefits following a divorce or the dissolution of a registered partnership etc. Any interest earned will also be credited to your retirement assets.
Your retirement assets will be reduced if you have made early withdrawals for the purchase of residential property. Payments made following a divorce or the dissolution of a registered partnership will also reduce your benefits.
Contribution gaps
Contribution gaps in your pension account are generally caused by salary increases. They can also occur after a divorce or the dissolution of a registered partnership because the courts have ruled that former partners must be given a share in the retirement assets.
Other reasons for contribution gaps include: relocation within Switzerland or starting paid employment after the age of 25; an increase in retirement credits; gaps in employment, for example due to unemployment, time spent abroad, university studies, sabbaticals, parental leave etc.
Voluntary contributions
Voluntary contributions to a pension fund are a personal addition to your occupational pension in Switzerland. This allows you to increase your retirement assets and reduce your taxes. You can declare a personal payment of this kind as a contribution to your occupational pension and cut the amount of tax you have to pay. The important thing to remember is that you finance the voluntary contributions to the pension fund entirely from your own money.
You should also be aware that voluntary contributions tie up capital in the long term. The law does not generally allow you to withdraw money which you have paid into a pension fund, even if you suddenly need the money urgently for other purposes. This is one of the differences between a pension account at a Swiss pension fund and a bank account, which you can withdraw money from whenever you need it.
Contributions can be made at any time to compensate for the division of retirement assets after a divorce and are not affected by any restrictions on contributions.
Contributions and the provisions of the OPA
The Occupational Pensions Act (OPA) specifies the following three requirements for voluntary contributions:
- you are in employment and have been enrolled in a pension fund by your employer;
- the regulations and pension plan of the pension fund allow for voluntary contributions (this is the case with Integral);
- there is a gap in your contributions which will reduce your retirement benefits.
The OPA specifies the following restrictions on voluntary contributions:
- your assets in any vested benefits accounts or policies must be deducted from the maximum voluntary contribution amount;
- any early withdrawals for the purchase of residential property must have been repaid in full before you make voluntary contributions;
- if you have moved to Switzerland from another country and have never been a member of a Swiss pension fund before, any voluntary contributions you make in the first five years may not exceed 20 percent of your insured salary.
