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Old 15.10.2020, 20:21
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Pension Law Changes - Unemployment at 58 and older

Effective 1 January 2021, employees, who are 58 and older and who are terminated by the employer, can remain in the employer's pension plan. This is a translation from a City of Zurich Pension Plan webpage which describes the pension law changes:

"For all insured persons from age 58

From 2021 onwards, it will be possible for all insured persons aged 58 or older to remain in the pension fund if the employment relationship is terminated by the employer.

This improvement in the occupational pension scheme for insured persons is linked to the reform of the supplementary benefits and the corresponding changes in the BVG, which will come into force on 1 January 2021.

Continued insurance as an opportunity

This is an opportunity for you as an insured person in the event of unemployment your pension will be retained. Insured persons whose employment relationship was terminated by the employer after 31.07.2020 can remain insured with the pension fund from 1 January 2021.

The new rules apply from 1 January 2021:

  • Insured persons from age 58 can voluntarily decide to remain with the pension fund if the employer terminates the employment relationship and they are not insured through a new employer.
  • The repayment of a WEF ("promotion of home ownership") advance withdrawal is also made easier: Repayments are now possible until retirement.
  • Reclaims of supplementary benefits can be offset directly against pension fund benefits."
https://www.pkzh.ch/content/pkzh/de/...020-23-07.html
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Old 15.10.2020, 20:40
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Re: Pension Law Changes - Unemployment at 58 and older

So letís get this straight. The goverment are making it more expensive for companies to fire older people and therefore they will never hire a 50 year old. Thatís the consequences

I just hope the pension funds are well capitalised and donít go bust like in the Uk
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Old 15.10.2020, 20:50
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Re: Pension Law Changes - Unemployment at 58 and older

I'm not sure it would be that much more expensive - I assume the company doesn't have to keep paying, you just don't have to go to the bureaucracy of moving the funds to another account.
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Old 15.10.2020, 21:16
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Re: Pension Law Changes - Unemployment at 58 and older

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I'm not sure it would be that much more expensive - I assume the company doesn't have to keep paying, you just don't have to go to the bureaucracy of moving the funds to another account.
Depending on ones risk profile, moving would probably be preferable. I doubled my Swiss pension in 5 years in CHF with fundsmith. What is the earliest age you can vest the benefits, 63 as pillar 1 or earlier?
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Old 15.10.2020, 21:35
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Re: Pension Law Changes - Unemployment at 58 and older

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So letís get this straight. The goverment are making it more expensive for companies to fire older people and therefore they will never hire a 50 year old. Thatís the consequences
For the company it is or should not be more expensive as the pension plan itself is normally outside of the companies budget and the contributions is solely defined by the pay roll of the actual active employees.

It just means that the money remains in the pension plan. The main benefit for the employee is that the get an entitlement for a pension instead of the lumpsum once they reach the pension age.


@fatmanfilms: Depends on the pension plan. Some allow withdrawal at age of 58 to 60.
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Old 15.10.2020, 21:50
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Re: Pension Law Changes - Unemployment at 58 and older

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It just means that the money remains in the pension plan. The main benefit for the employee is that the get an entitlement for a pension instead of the lumpsum once they reach the pension age.

Depending on the size and state of the pension fund that may or may not be a good situation.
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Old 15.10.2020, 21:53
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Re: Pension Law Changes - Unemployment at 58 and older

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Depending on the size and state of the pension fund that may or may not be a good situation.
One has still the option to transfer it to an other vested benefit account with better performance or depending on the age get the money as an early lumpsum payment which would allow to freely invest the money.
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Old 15.10.2020, 21:59
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Re: Pension Law Changes - Unemployment at 58 and older

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I'm not sure it would be that much more expensive - I assume the company doesn't have to keep paying, you just don't have to go to the bureaucracy of moving the funds to another account.
That's right. The company does not have to pay any further contritutions.

Contributions comprise a risk portion and a savings portion.

For the risk portion, an ex-employee who elects to remain in the company's pension plan must pay in the employee's and the employer's contribution.

If the ex-employee defaults, then the pension plan can warn and, in the absence of the ex-employee catching up those payments, the ex-employee can be excluded from the pension plan.

In other words, the way to keep the cover is to
a) make sure you don't miss the deadline to declare that you want to continue, and
b) reliably pay in the risk portion, both your own and that which was formally covered by the employer.

For the savings portion, contributions are voluntary.
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Old 15.10.2020, 22:29
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Re: Pension Law Changes - Unemployment at 58 and older

can I just ask whether there have been any scandals like big corps pensions blowing up. Similar to BHS or other Uk companies that had massive pension defecits

As more money gets stuffed in my pension I worry that my salary and pension is with one company - Hardly diverisifcation is it

Has the CH goverment ever stepped in and saved a collapsed pension scheme?
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Old 15.10.2020, 22:54
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Re: Pension Law Changes - Unemployment at 58 and older

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can I just ask whether there have been any scandals like big corps pensions blowing up. Similar to BHS or other Uk companies that had massive pension defecits
Sure: BKV ZŁrich comes to mind. https://www.handelszeitung.ch/die-bvk-affaere

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Has the CH goverment ever stepped in and saved a collapsed pension scheme?
Yepp, but it was the canton ZH goverment, or to be more precise the taxpayer. But that was because they were there own PK. Otherwise they have to get their shit together themselves.

But when private pension provider goes bankrupt some of the money is insured by the BVG-Sicherheitsfond risk.http://www.sfbvg.ch/xml_1/internet/E...cation/f68.cfm


https://www.freiburger-nachrichten.c...ht-der-konkurs
https://www.srf.ch/news/schweiz/mill...dal-verwickelt
https://www.handelszeitung.ch/untern...tos-finanziert
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Old 15.10.2020, 23:20
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Re: Pension Law Changes - Unemployment at 58 and older

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Depending on ones risk profile, moving would probably be preferable. I doubled my Swiss pension in 5 years in CHF with fundsmith. What is the earliest age you can vest the benefits, 63 as pillar 1 or earlier?
By the time you've reached a good age it would quite possibly be financially better to retire simply so you can invest your pillar 2 properly instead of having it languish in a typical Swiss pillar 2 account.
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Old 16.10.2020, 09:55
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Re: Pension Law Changes - Unemployment at 58 and older

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Depending on ones risk profile, moving would probably be preferable. I doubled my Swiss pension in 5 years in CHF with fundsmith. What is the earliest age you can vest the benefits, 63 as pillar 1 or earlier?
Can you move your Swiss funds to a non-Swiss-pension provider at that age? I didn't think so?

Obviously at retirement you can withdraw the funds and invest them wherever you like.
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Old 16.10.2020, 10:19
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Re: Pension Law Changes - Unemployment at 58 and older

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Can you move your Swiss funds to a non-Swiss-pension provider at that age? I didn't think so?

Obviously at retirement you can withdraw the funds and invest them wherever you like.
If you leave the country & not working or become 'self employed' almost certainly yes.
You are leaving the pension due to 'not working'
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Old 16.10.2020, 10:22
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Re: Pension Law Changes - Unemployment at 58 and older

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If you leave the country & not working or become 'self employed' almost certainly yes.
You are leaving the pension due to 'not working'
Leaving the country is a bit extreme, although given the crap growth of a Swiss pension fund could easily pay for itself within a year!
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Old 16.10.2020, 20:18
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Re: Pension Law Changes - Unemployment at 58 and older

To add to the above, VZ VermŲgenszentrum makes these comments on this pension law changes (translated):
  • You can only continue the risk insurance against death and disability or also the old-age savings. However, you must pay the premiums yourself - including those of your employer.
  • If the continued pension coverage lasts for more than two years, you usually have to draw your pension fund money as a periodic pension payment (Rente) and can no longer have it paid out as a lump sum (Kapital).
  • Moreover, in such a case, you are no longer allowed to withdraw or pledge your savings to finance home ownership.
Full article is at p. 17 at this link (German):

https://www.vermoegenszentrum.ch/new...rtcutVznews123
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Old 17.10.2020, 16:01
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Re: Pension Law Changes - Unemployment at 58 and older

Have my big bank exit agreement discussion at age 58 end of this month. If I’m allowed within this agreement to pass on any info (which I doubt), then I will keep you guys up-to-date.

This has been very useful - thank you!
Just as a note, my exit (at my own wish) is scheduled post January 2021. So I should fall within the parameters of the original post.

Last edited by ZuriRollt; 17.10.2020 at 16:18. Reason: Addendum
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Old 17.10.2020, 16:05
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Re: Pension Law Changes - Unemployment at 58 and older

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Have my big bank exit agreement discussion at age 58 end of this month. If Iím allowed within this agreement to pass on any info (which I doubt), then I will keep you guys up-to-date.

This has been very useful - thank you!
Good luck anyway, hope it works out well for you
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Old 17.10.2020, 16:48
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Re: Pension Law Changes - Unemployment at 58 and older

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Good luck anyway, hope it works out well for you
As Iím working for a big bank (they are risk adverse), itís pretty transparent and initially seems in-line with any new entitlement pension regulations per 2021. Iím OK with it.

But I wonít know until end of month.
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Old 27.11.2020, 14:56
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Re: Pension Law Changes - Unemployment at 58 and older

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As I’m working for a big bank (they are risk adverse), it’s pretty transparent and initially seems in-line with any new entitlement pension regulations per 2021. I’m OK with it.

But I won’t know until end of month.
So here the latest. No-one really understands how this could really benefit anyone. Yes, it’s been a topic at my employer big bank HR (I was ahead of them because I follow EF ).

Having been more or less pushed into early retirement (which frankly I’m happy about), I had this discussion last week.

In order to keep in the company pension scheme, you need to carry-on paying not only your own contributions, but also those of the company. For this, you get to keep the insurance benefits in-case of disability or death.

When you have been made unemployed at 58+, probably not an attractive proposal in many cases.
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Old 27.11.2020, 17:17
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Re: Pension Law Changes - Unemployment at 58 and older

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In order to keep in the company pension scheme, you need to carry-on paying not only your own contributions, but also those of the company. For this, you get to keep the insurance benefits in-case of disability or death.

When you have been made unemployed at 58+, probably not an attractive proposal in many cases.
You will have the right to reduce your pension contribution, by requesting that a notional salary (income subject to AVS) that is lower than your current one is used as the basis for pension contributions.

Staying in the plan means you receive the same annual interest rate growth on your accrued pension savings as any other employee.

Do you find the HR team are well informed about the pension - I would be asking my questions to a member of the pension committee, or pension fund manager, if there is one. The pension plan is likely to be a separate legal entity from the bank.
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