What women need to consider when planning for retirement

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These days, women are confident: After a career break to bring up children, they usually return to work – often part-time. Our expert, Petra Kolb, gives you helpful tips on how you as a woman can plan for a secure retirement. 

Ms. Kolb, many women today are increasingly better educated than men*. However, their careers generally look different. What is the main difference as regards women's career paths?

Petra Kolb: The majority of women still remain at home when they have their first child. Even if they already have a successful career. The time spent at home with their family is much appreciated and means a great deal to most women. As a rule, they return to work when the child is a little older – usually on a part-time basis to begin with.

Sometimes they have difficulties re-entering the workforce. Why is this?

It's the other side of the coin: There's a shortage of all-day schools here in Switzerland, and it can take parents a long time to find suitable childcare. This causes a problem for working women: The longer they wait, the more things change in the workplace. Technological development is just one factor. Because digitization is changing our jobs as well as our private lives. Anyone who falls behind has a lot of catching up to do. Taking a few years off can present a major obstacle to returning to the workplace.

Almost 60% of employed women work part-time – that is the great majority. What are the consequences as regards paying into and receiving benefits from the pension fund?

Payment gaps often occur during a childcare break, because while a woman is off work, no contributions are paid. But even after her re-entry, contributions are lower. Assuming that she now works part-time, her salary is lower and so are her pension fund contributions. This leads to fewer retirement assets being accumulated: The woman will subsequently receive a smaller pension.

An important tip from me for women who want to resume work part-time: Make sure that the employer calculates the coordination deduction in line with the proportion of full-time hours actually worked. In other words, the coordination deduction will not be CHF 24,675, as it would be for a full-time post, but half that amount in the case of a 50% position, for example. The pensionable salary is then higher. Despite being on a lower annual salary, you can thereby pay considerably more into the pension fund and save more for your retirement. Although this will not close the existing payment gaps, it will at least help stop them getting much bigger. It is definitely worth summoning up the courage to tackle the topic at the job interview stage.

Payment gaps often occur while women are at home caring for their children.

Petra Kolb, pensions expert

There's one topic that many couples fail to consider: If the woman stays at home to bring up a child and then becomes ill or has an accident, who will look after the child and how can the costs of domestic work and childcare be covered?

Yes, an accident or illness can be a burden on many levels. It is often the case that the healthy partner then suffers both financial and time stress in addition to the other worries. It is very reassuring if provision has also been made for such emergencies. Risks such as disability can be covered with a corresponding pension, for example. There are risk insurances that also include the cost of domestic help. A wide variety of insurance models are available. They need to be geared to the partners' income and the individual situation. It is best to have an individual consultation with an advisor. That is always worthwhile.

What opportunities are there to make up for existing pension gaps?

Returning to work makes you feel good about earning money again – it certainly helps the household budget and it's nice to be able to afford the occasional treat. However, it's important not to forget about private retirement provision when seeking to fill the gaps. In particular, Pillar 3a with its tax breaks should be used for making payments. You can also make additional payments into the pension fund. This has a tax effect: Pension fund interest rates are often still favorable and general interest rates are very low at present. If possible, you should of course try to continue making contributions during phases when you are not employed, but unfortunately you are not allowed to use Pillar 3a for this purpose. AXA has a good solution: We have a model which allows existing Pillar 3a policies to be switched to Pillar 3b during this phase, and then back to Pillar 3a on your return to work.


1 See: von Erlach, Emanuel and Segura, Juan, Federal Statistical Office (FSO), 2011, Männer und Frauen an den Schweizer Hochschulen – Indikatoren zu geschlechtsspezifischen Unterschieden, Neuchâtel, p. 22

2 See: Hosp, Janine and De Carli, Luca, Tagesanzeiger, Oct. 24, 2017, So stark geht die Schere bei der Matura-Quote auf

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    Petra Kolb

    is head of women’s issues at the General Agency for Pensions and Assets As a professional woman, she offers important tips on the topic of part-time working and explains how to prepare for your future as efficiently as possible.

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What exactly is the coordination deduction?

The coordination deduction needs to be understood in the context of the Swiss three-pillar system.
In the first pillar (AHV), a compulsory insurance amount is deducted from everyone's salary and the entire population is insured. The second pillar applies to the working population for whom a salary component is deducted for the occupational benefits pension fund.

An obligatory portion is deducted from net annual income – however large or small – in order to ensure that the salary component already insured via the first pillar does not have to be insured again via the second pillar. The calculation basis for second-pillar occupational benefits is therefore the annual net salary minus what is known as the coordination deduction, which is currently CHF 24,675 (2017 figure). The remaining annual net salary minus the coordination deduction is insured in the pension fund. This portion of the insurance is used to save for retirement.

In some circumstances, it may be too low for employees who do not work full-time. For example, if a woman works 50% or less of full-time hours when she returns after a break, then the remaining annual salary insured in the second pillar will be very low after the coordination deduction, and will not be enough to ensure a good level of pension savings. This is why Petra Kolb recommends asking the employer to calculate the coordination deduction in line with the proportion of full-time hours actually worked. For a 50% position, that would be just CHF 12,337.50. A higher proportion of income is thereby insured in the pension fund – and more money is saved for old age.

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