How do I choose the best pension fund for my company?
How do I find the right pension fund for my company? What should I bear in mind when switching pension funds? Whether you’re a sole proprietorship or an SME, we answer the most frequently asked questions about choosing a pension fund and provide you with our checklists to make switching a breeze.
Which companies need a pension fund?
Companies are required to join a pension fund if they
- employ persons who are subject to OASI contributions (applies to persons who have reached the age of 18 from January 1 onwards),
- who each earn more than CHF 22,680 per year (as of 2026) and
- have a permanent employment contract or an employment contract lasting more than 3 months.
In this case, companies are required to join an occupational benefits institution registered in Switzerland (Art. 11 para. 1 OPA) (in German). The OASI office checks whether the obligation to join a pension fund has been met. Further information can be found in the Federal Act on Occupational Old Age, Survivors’ and Invalidity Pension Provision (in German).
Why do companies need a pension fund?
The purpose of a pension fund is
- to secure financial provision for employees for retirement in old age and
- also to insure employees against the risks of disability and death due to illness.
Occupational benefits insurance is Pillar 2 of the Swiss social insurance system and, together with Pillar 1, aims to achieve a pension income of around 60 percent of the employee’s last salary. For this purpose, monthly contributions are deducted from the employee’s salary:
- Savings contributions for the accumulation of personal retirement capital
- Risk contributions against the risks of death and disability due to illness
Employers must pay in at least the same amount as employees (statutory minimum). However, they can also voluntarily provide better insurance for employees by taking their needs into account when designing their pension fund solution. For example, the insured salary, the coordination deduction, or the amount of disability benefits can be adjusted.
Would you like to know how well protected you and your employees will be in retirement? Have an AXA expert review your current insurance and pension solutions.
Voluntary pension fund membership for the self-employed
Occupational benefits insurance is not mandatory for the self-employed. But under certain conditions, they can take out insurance voluntarily. Typical reasons for joining a pension fund are retirement provision, risk protection and tax advantages. A pension fund can be a sensible addition for sole proprietorships in particular. Use our free insurance check to find out whether joining a pension fund is worthwhile for you. Find out here about various pension solutions for the self-employed.
Can a company choose its own pension fund?
Yes, companies can generally choose their own pension fund. There are the following options:
- You can set up your own company pension fund.
- Your company can join an existing occupational benefits institution, e.g. a collective foundation, a joint institution or a pension fund from an appropriate trade organization.
- Your company can join the Substitute Occupational Benefit Institution LOB. On behalf of the federal government, it accepts all interested employers and individuals without exception – provided that the legal requirements are met.
If a company is not yet affiliated with an occupational benefits institution, the employer will select one. To change to another occupational benefits institution, employers require the consent of staff or an employee representative body. Only occupational benefits institutions that are entered in the register for occupational benefits providers can be considered for this purpose.
Does my company have to join the association fund?
No, you don’t necessarily have to join the association fund, even if your company is affiliated with a professional association. Trade organizations often have their own pension fund that is geared to the special needs of its members and also often offers protection for the self-employed who don’t have any employees. There are also associations that offer specific collective foundation solutions exclusively for their members. During the consultation, an association member must be made aware of the existing internal solution and of any consequences of non-affiliation.
What rules apply when choosing a pension fund?
Employers must enroll with a pension fund within two months of becoming obligated to join a pension fund. Otherwise, the compensation office will register the company with the Substitute Occupational Benefit Institution LOB retroactively. If you fail to join a pension fund or fail to comply with the registration check, you are committing a criminal offense.
What are the differences between pension fund models?
If you are interested in joining a collective or joint foundation, you have the choice between full-value insurance and a semi-autonomous solution.
Full-value insurance
- A full-value insurance solution offers insureds greater security, because underfunding (pension fund assets less than liabilities) is not possible.
- The capital is invested more conservatively than with a semi-autonomous solution. This generally means insureds earn lower interest on their retirement savings.
- Full-value insurance is generally more expensive than a semi-autonomous solution.
Semi-autonomous solution
- Thanks to the pension fund’s more return-oriented investment strategy, insureds can expect higher average interest on their retirement assets than with full-value insurance.
- The pension funds share some of the investment risk, so restructuring measures cannot be ruled out.
- Insureds generally benefit from lower costs.
Is there a quality certification for pension funds?
No, there is no official quality label for pension funds. The interest group for autonomous collection and joint foundations, inter-pension (in German), offers helpful information about the quality of pension funds. It advocates for independent retirement solutions and provides a pension fund overview with key figures. Various newspapers and trade magazines, such as Penso (in German) or Sonntagszeitung, publish an annual pension fund rating. In these publications, classic key figures such as investment returns, interest payments, and risk and administration costs are compared with each other.
Can I switch my company to a different pension fund?
Yes, employers can switch to a different pension fund with the consent of the staff or an employee representative body, if applicable. Employers are responsible for ensuring that the switch is made correctly.
How does switching pension funds work?
Switching pension funds starts with the evaluation phase. Important questions are: “What needs are there? Which pension funds are currently fully funded? Which ones are we not interested in?” Based on this needs analysis, the second step is to make a pre-selection of pension funds. Corresponding offers are now obtained – followed by the comparison phase. Since choosing a new occupational benefits institution also affects their employees’ security, companies like to consult pension experts when switching. They guide you through the complex process and ensure that the company has met its needs in the end. A state-of-the-art pension fund solution also increases the company’s attractiveness.
Are you looking to change pension funds? Our pension experts will be glad to assist with support and advice.
How often can I switch pension funds?
In theory, you can switch your pension fund as often as you like in compliance with the contractual notice period. However, switching may cost you time and money. Occupational benefits institutions pay attention to the composition of their portfolio of insureds, e.g. the age structure. This affects new members in particular. Companies that have a larger number of older employees are therefore at a disadvantage if they want to switch. Apart from the Substitute Occupational Benefit Institution LOB, pension funds are not required to accept anyone that applies.
How long does it take to switch pension funds?
Switching pension funds generally takes several months. On the one hand, this is because employees are involved in the switch owing to their right to participate in the decision-making process. On the other hand, the employer must document the process, all terms and conditions and the declaration of consent of the staff or the employee representative council in detail.
Is there an obligation to provide information?
Yes, there is an obligation to inform employees because they must be regularly involved in the pension fund decision-making process due to their right to participate. The switch will be decided jointly. Without employee approval, the cancellation and switch are not valid. The ceding pension fund is obliged to verify that this criterion is met.
More detailed information on the ruling of the Federal Supreme Court of May 5, 2020, regarding switching pension funds can be found in the article “Switching to a different pension fund – what do you need to be aware of” by MyRight“.
Tips for choosing a pension fund
Which pension fund will work for my company? And what do I need to bear in mind when switching to a different pension fund? We have drawn up a checklist to help you out.
How do I find the right pension fund?
Which pension fund is best for a company depends on a number of factors. When choosing, consider the following internal company criteria:
- Company profile (e.g. sector, age structure of employees)
- Security claims and risk tolerance regarding investment performance and any underfunding
- Risk capacity of the company
- Development outlook for the company (e.g. start-up)
- Concerns of the occupational benefits fund commission and employees
Selecting a pension fund is needs-based and every company will have different priorities. Ask yourself the following questions about pension provision:
- Am I willing to take on a certain amount of risk?
- How old are my employees?
- How flexible is my plan design?
- How important are extra services?
How do you make switching pension funds a breeze?
These six tips will make the process easier for you:
- Keep in mind that making the switch takes some time.
- Consider your employees’ right to participate in the decision-making process: Their risk tolerance and risk capacity are included in the company profile and influence the choice of solution.
- Check early whether pensioners also need to be transferred to the new pension fund .
- Think and act long-term: Don’t just focus on the pension fund solution as such, but also consider who manages the assets in the background, for example, and how successful they are. Don’t just look at last year’s performance and interest rates, but look at them over several years.
- Be aware of your pension fund obligation: As an employer, you are required to join a pension fund. But you don’t always get your first choice. Pension funds reserve the right to review applications and reject them.
- Let the experts advise and support you: saving you time, money and stress.
Written by:
Nadine Graf
Nadine Graf is a theme manager and writes texts for AXA on topics related to insurance and beyond.
