Yves Spühler, Head of Economic Policy and Economics, Central Switzerland Chamber of Commerce and Industry (IHZ), Lucerne
Mr Spühler, this year you included the topic «the pension fund as an instrument of employee retention» in the survey. What did you learn from the responses of the 224 IHZ members surveyed?
In Central Switzerland, companies attach great importance to offering their employees a well-developed pension fund in addition to the usual benefits. Around 60 percent of the companies surveyed, for example, link the co-ordination deduction for part-time employees to the degree of employment. As a result, these employees benefit not only from higher pensions or capital at retirement age, but also from improved insurance benefits while they are still employed.
Are employees aware that the pension fund is an important salary component?
That’s hard to say, because many employees often only notice that they have a deduction for their BVG/LPP pension and thus receive less salary.
What could companies do to improve their employees’ understanding of pension funds?
They could do what, encouragingly, 44% of the firms surveyed already do on a regular basis: they could offer information events about the pension fund. Such services can give a company a competitive advantage by offering employees added value.
Who is normally responsible for such information events at an SME or large company?
On the one hand, HR employees already communicate extensively via internal platforms and in face-to-face meetings. On the other, such information events may also be delegated to a dedicated insurance broker. There are also more and more pension funds offering such information events and holding them on a regular basis.
Why should employers do so much for the pension fund situation of their employees?
At present, there is a severe labour shortage and this will remain so for the next few years to decades. In order to recruit successfully and retain employees over the long term, companies should also present themselves in a more active and attractive manner with regard to their pension fund – a well-developed pension fund is a salary component with a high protection factor for employees and their family members. But this has to be explained well. An easy-to-understand information sheet is recommended.
«Optional BVG/LPP plans make companies more attractive and improve employee retention.»
Pension funds are often seen only as a provision for retirement. How do you respond to such statements?
Saving for retirement is just one of the three pillars of the occupational benefits system. Protection against disability and death often gets overlooked in this context. Should such a tragic event occur, the pension fund will also step in and help the insured person or their surviving dependants financially. Occupational pension benefits are therefore about much more than just ensuring financial security in the third stage of life.
It is often said that employees have no influence over the pension fund. What is your view on that?
In discussions with companies, we have also noticed that many employees have this attitude and are often satisfied with the conditions offered. But companies can actively involve employees with optional BVG/LPP plans. Such optional plans enable employees to make additional savings for retirement on an individual and voluntary basis. This choice encourages employees to start thinking about their retirement provision at an early stage. Furthermore, the additional capital saved benefits from the compound interest effect and the savings premiums reduce the employees’ personal tax burden, meaning that they benefit twice. Thirty-five percent of the companies surveyed already offer optional plans, but there is still potential here. This simple measure is cost-neutral for companies in most cases and offers real added value for employees.
Is there a basic point you would advise every pension fund member to consider when it comes to their own pension fund situation?
I actually have two key points to keep in mind at all times. Firstly, you should look at and check the insurance certificate you receive each year. If you do not understand certain values or figures, it is essential to contact the person responsible at the pension fund. They will be happy to help. Secondly, people in a cohabiting partnership must always complete a beneficiary declaration to ensure that survivors’ benefits are actually paid out. This is something that often gets forgotten, especially when employees change employer and pension fund.
This interview was conducted by Mario Bucher, Product and Process Development at PensExpert AG.
