Pension funds are an important fringe benefit for employees. This is especially true for higher-paid staff, such as executives and specialist staff, who are in high demand on the labour market. Companies wishing to attract and retain quality employees at this level should be able to offer them an attractive employee benefits scheme.

What many employers do not know is that basic pension fund cover is often inadequate for their higher-paid employees. This can lead to considerable benefit gaps, for example due to insufficient retirement capital savings, or a lack of adequate cover in the event of accident, disability or death. Executive or supplementary pension plans are a good solution for this.

What are executive or supplementary pension solutions?

Executive pension solutions are more extensive employee benefits schemes for executives at various hierarchical levels of a company. Different pension plans can be offered at different levels (e.g. middle management, senior management, executive management). Supplementary pension solutions, on the other hand, cover employees above a certain salary level, regardless of their function at the company.

Both solutions aim to offer better protection to employees with higher salaries. Generally, the financing and structure of the benefits are subject to different provisions than those of basic pension plans. This is why such pension solutions are often set up as a separate employee benefits unit with its own pension fund committee. Another argument in favour of a separate solution is its high level of confidentiality.

What are the benefits of these solutions?

Executive or supplementary pension plans can insure salaries of up to CHF 882,000, while the maximum under the BVG mandatory scheme is CHF 88,200. Higher benefits can also be insured in the event of accident, disability or death. What’s more, employers can pay higher contributions than the statutory 50%. Another interesting feature for members consists of the additional options for voluntary buy-ins into the pension fund, which can be used to optimise taxes.

Needless to say, executive or supplementary employee benefits solutions take up a certain amount of time in terms of administration and communication with members, as well as entailing additional financing costs. At the same time, companies offering an attractive executive pension solution have a major advantage when it comes to recruiting and retaining key employees.