The LPP, an obligation that deserves a strategy
Professional insurance covers old age, disability and death. Any employer who employs employees subject to the LPP must affiliate with a provident institution and notify the employees concerned.
The legal minimum is rarely enough to create a real social policy. By adapting the plan, you can better protect part-time workers, executives, high salaries and families, while controlling the employer burden.
LPP 2026 parameters
- Entry threshold: CHF 22,680 annual salary with the same employer.
- Coordination deduction: CHF 26,460 to calculate the coordinated salary.
- Minimum coordinated salary: CHF 3,780 in the compulsory portion.
- Mandatory maximum coordinated salary: CHF 64,260, with maximum annual LPP salary of CHF 90,720.
- Financing: the employer covers at least 50% of the total contributions.
- Age: death and disability coverage from January 1 following age 17; old age savings from January 1 following age 24.
Choices that change the quality of the plan
- Coordination deduction: reducing it or adapting it to the activity rate improves part-time coverage.
- Insured salary: insuring beyond the mandatory ceiling avoids a gap for executives and high earners.
- Employer co-payment: paying more than 50% is a visible and appreciated social advantage.
- Risk services: strengthening death and disability better protects families.
- Framework plan: enables additional savings and risk benefits for objectively defined groups.
- Communication: a good plan is more valuable if employees understand their BVG certificate.
Full or semi-autonomous insurance?
Comprehensive insurance offers maximum security: the insurer bears the investment risks and avoids undercoverage. It is often suitable for small structures that want a predictable load and little complexity.
The semi-autonomous solution aims for better long-term return potential, but the company and the policyholders accept a share of investment risk. It can be attractive for more established SMEs, with sufficient payroll and good risk tolerance.
When to review your pension fund?
- You hire your first employees.
- Your business is growing or significantly changing its age structure.
- You recruit executives or highly qualified profiles.
- Your part-time employees are poorly covered.
- Administrative costs seem high or the service is cumbersome.
- You want to compare full insurance, semi-autonomy or extra-mandatory plan.
Common errors
- Choose the fund based solely on the premium, without comparing the benefits.
- Do not check the non-mandatory part and its conversion rate.
- Forget variable salaries, bonuses or salaries above the LPP ceiling.
- Leave a penalizing coordination deduction for part-time workers.
- Not properly informing employees about their services.
- Wait until the end of the year to change funds when the cancellation deadlines have already passed.
Our support
Finwise audits your LPP plan, compares pension funds, calculates the employer-employee cost and helps you choose a solution adapted to your HR policy. We can also coordinate the LPP with loss of salary due to illness, LAA/LAAC and executive protection.
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