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| If a company has an employee earning a gross salary of say 100000k, the company must enroll him in occupational pension scheme if he works for more than 3 months with him. This is pillar 2 (in addition to the other compulsory element pillar 1)
My questions are :
a) What are the minimum and maximum contributions %, and on what salary are they based ?
b) If the employee bears all the company costs, is it better that the company pay all the pension pillar 2 for the employee, and so reduces his gross salary on which deductions are made.
I realise these are quite specialist questions, but I am looking at the overview stuff available on the net, and I am none the wiser...
Thanks in advance
dave | |
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If he is earning more than 25K they need to have him in a pension fund.
1. The minimums are set out in a table that you should be able to get hold of. It is as Shorrick says with the progressions being 18-25(=0%), 25-35, 35-45 etc. Note under 25 there is risk only. What the contributions are based on is dependent on the scheme you have in place. The minimum is on the salary lying in the difference between the AHV loan maximum and pillar 1 contributions. The maximum is theoretically fairly open until the last five years of contributions when it is in tight bands. If however you contribute too much the tax office might see this as not acceptable - problem here is that once contributed money cannot be taken back out of a pension scheme...
2. The minimum contribution of the company is 50% of the cost in which case your model won't work.
3. I know you never asked this question. As a company owner the pension scheme is the best method of tax evasion possible. This is especially true if you have multiple employees. For example if you have a good year and have surplus cash you can prepay BVG contributions up to a maximum of 5 years. This is then tax free. Now look how good this can be with this example...
4 employees each earning 100K
Pension rate is 20%
You prepay 5 years worth of BVG = 400K
You then decide to liquidate the company.
You transfer the pension schemes of the employees to their next employers scheme.
You then are still left with your scheme and your prepaid locked account. The company is closing the money is there and you are the beneficial owner. The money is thus transfered into your pension fund ie all of it.
