The pension fund statement contains important information about your pension planning. For example, it tells you how much is saved in your pension fund, how much you can spend to finance a home, and what your invalidity pension would be if something were to happen to you. Below we explain the ten main terms.
The insured salary corresponds to the AHV annual salary (gross salary) according to your salary statement.
The insured salary is calculated by deducting a fixed amount (“the coordination deduction”) from the annual salary. This is a maximum of 24,885 francs. The insured salary is also known as “coordinated salary”.
You have already saved this much into your pension fund. Retirement assets include all contributions paid by you and your employer.
You will have saved this much into your pension fund by the time you turn 65, provided you earn the same amount consistently and interest rates remain at current levels. To calculate the pension amount, pension capital is multiplied by the “conversion rate.” This rate determines how the amount you have already saved is converted into a pension.
If you retire early, your expected pension will be lower. You have paid in contributions for less time, there is less interest income and the conversion rate is lower because the pension will be paid out for longer according to how early (number of years) you start drawing it. This results in an overall reduction in your pension of around 7 to 8 percent for each year you draw it early.
If you pass away, your relatives will receive the amounts listed. Are you cohabiting with a partner? If so, check whether your pension fund pays survivors’ benefits in this case. The same applies to married couples without children.
Maximum annual benefits you will receive in the case of full disability resulting from illness.
The amount of the annual contributions made by you and your employer that go towards retirement savings and the amount that goes towards risk insurance also have an impact on the level of benefits on retirement. Administration costs vary depending on the pension fund.
You can use this amount at any time to buy a self-occupied property or to pay off your mortgage.
In addition to your pension fund contributions, you can also make voluntary payments into your pension fund. This helps to increase your retirement benefits – the pension or a lump sum – and depending on the pension fund, the benefits payable in case of disability or death. Voluntary purchases into a pension fund are income tax deductible and help you to save on taxes.
Early withdrawals for home ownership must be repaid before tax-privileged contributions are possible. If you would like to receive a lump-sum payment, you should finish buying into your pension three years before you draw the pension.
This gives information about the “health” of a pension fund. A funding ratio of 100 percent means that the fund is only just able to meet its current and future obligations. If the funding ratio exceeds this, your pension fund is financially “healthy.”
Do you have any questions about the pension fund statement?
We are happy to answer any questions you might have about your pension fund statement and give you comprehensive advice on related pension questions, such as:
- Will I have enough money when I retire?
- How can I invest my money to get higher returns?
- How can I finance my own home using my retirement savings?
- How can I plan my retirement in order to save on taxes?