2nd pillar choices

[mabi]

@jay

However, I expect the risk insurance part of the pension fund (disability and death) to only increase with option (a). This will likely also imply an increase in the monthly risk premium (typically covered half by the employer).

You are totally right about that, I actually have an offer from the BVG for this option a) and the Risikoprämie goes up from 2k/year for my current situation (at 60k insured salary) to 3k/year for 120k of insured salary. Comparing relatively for my current situation the Risikoprämie is 23% of the total yearly BVG costs which employer/employee share. With the option a) offer of 120k insured the Risikoprämie is relatively slightly lower at 18% but yes in terms of real numbers it is higher.

@jay

Edit: I forgot that the law imposes a maximum of 25% for total retirement contributions. I.e. as I understand it, it’s impossible to have double the mandatory retirement contributions from age 45 onwards. This means that option (a) will be significantly better in the long term.

Good point! I remember reading another thread here on this forum where some people have been posting the % contributions of their BVG contract with their employer and I remember someone who had over 25% but maybe I can’t remember well or this was a mistake. I can’t find that thread anymore…

[jay]

@mabi

Good point! I remember reading another thread here on this forum where some people have been posting the % contributions of their BVG contract with their employer and I remember someone who had over 25% but maybe I can’t remember well or this was a mistake. I can’t find that thread anymore…

For reference, the 25% maximum is from BVV 2 Art. 1 Abs. 2b. There may be exceptions I’m not aware of.

[mabi]

Thanks for the reference. As you say maybe there are exceptions in specific cases (high salaries, etc). If by chance I find that forum post again I’ll cross-link it here.

[pwi]

@jay

For reference, the 25% maximum is from BVV 2 Art. 1 Abs. 2b . There may be exceptions I’m not aware of.

I wouldn’t say exceptions, it’s just a more detailed interpretation of the law who allows higher contributions.

1. Those rules have to be fulfilled according to the calculation model “Gemäss Berechnungsmodell”.
2. the 25% rule has to be fullfilled for the total of the AHV-salary of all employees from the same employer “25 Prozent aller versicherbaren AHV-pflichtigen Löhne”

So if you model states there are lets say 50% of the AHV-salary for employees younger than 45 and 50% for employees oder than 45, you can have the following contributions.
25-44 → 15%
45-65 → 35%

But you cannot state any desired model in order to go up to 50% contributions. The maximum I have seen is something in the range of 35%, mostly for the employees older than 55.

[pwi]

@Cortana

I would definitely choose my employer by pension fund if I was close to retirement (>10 years). The last 10 years make up a huge amount in total contributions and there are differences in the conversion rate when you retire.

Well that would be if you intend to still be working at age 55+. Too bad the good pension fund contributions are not meant for the FIRE people who will hopefully retire before that age