comPlan: Everything you need to know about the Swisscom pension fund

The Board of Trustees is the highest governing body of a pension fund. It decides on key issues such as benefits, financing, investment strategy, and regulations. Employee representatives play an important role because parity in leadership is enshrined in law.

The conversion rate determines how an annual pension is calculated from the accumulated retirement assets. A lower conversion rate results in lower pensions for the same amount of capital.

The coordination deduction takes into account the benefits provided by the AHV (old-age and survivors’ insurance) and reduces the insured salary in the 2nd pillar. The coordination deduction disadvantages lower-income earners and part-time workers, as their insured salary is disproportionately limited.

The coverage rate shows the relationship between a pension fund’s assets and liabilities. A coverage rate of 100% means that the fund theoretically has sufficient funds to meet its obligations.

Death benefits are payments to surviving dependents, such as spouses, registered partners, or other designated beneficiaries.

With a defined contribution pension scheme, the future pension is derived from the accumulated capital. Most pension funds – including comPlan – operate on this principle.

Early retirement refers to retiring before the standard retirement age. Because contributions are paid for a shorter period and the pension is paid out for a longer time, this often leads to pension reductions.

ESG stands for Environmental, Social, and Governance. Increasingly important is not only how investments are made, but also the real impact of those investments – for example, on the climate, human rights, or working conditions.

If a pension fund experiences a significant financial shortfall, restructuring measures may be necessary. These include, for example, lower interest rates, additional contributions, or employer contributions.

Free resources exist when, after fully covering all actuarial obligations and establishing the necessary reserves (in particular the value fluctuation reserves), a surplus of pension assets remains.

Insured salary is the portion of income that is covered in the pension fund. Contributions and future benefits depend on it.

The interest rate determines the rate at which your retirement savings grow. A good interest rate strengthens your retirement capital and thus your future pension.

Pension funds invest their retirement savings in a diversified manner, for example in stocks, bonds, or real estate foundations. The goal is long-term returns alongside acceptable risks.

When you retire, part or all of your retirement savings can be withdrawn as a lump sum. Anyone who receives a lump sum receives a lower pension or no pension at all.

The OASI pension is the lifelong monthly benefit paid after retirement. Its amount depends primarily on the accumulated retirement assets and the conversion rate.

Pillar 2b refers to benefits that exceed the statutory minimum benefits under the Swiss Federal Law on Occupational Old Age, Survivors’ and Invalidity Pension Provision (BVG). At comPlan, for example, even higher salaries are fully covered.

With partial retirement, employment is gradually reduced rather than ended abruptly. Flexible models can facilitate the transition to retirement.

The Swiss Public Pension Fund PUBLICA organizes occupational pension funds. It manages contributions, invests pension assets, and pays benefits upon old age, disability, and death.

Retirement assets are the accumulated pension capital of an insured person. They grow through contributions from employees and employers, as well as through the interest rate.

Retirement provision in Switzerland is based on three pillars. The AHV (old-age and survivors’ insurance) forms the first pillar and is designed to secure basic needs. Occupational pension funds (2nd pillar) supplement the AHV. Together, they are intended to enable the continuation of one’s accustomed standard of living. The third pillar is voluntary savings by individuals outside of the social security system.

Returns are the profits generated from a pension fund’s investments. Consistently good returns strengthen financing and benefits.

The risk premium finances benefits in the event of disability and death. The amount of the risk premium depends, among other things, on the risks of the respective industry.

Social partnership means that employees and employers jointly regulate important issues. In occupational pension funds, this is reflected, among other things, in the equal representation of employers and employees on the Board of Trustees and in the union representation on the Board. These form the foundation for the joint management of the pension fund.

The technical interest rate is an actuarial assumption about the long-term achievable returns of a pension fund. It influences, among other things, the valuation of liabilities and the financing of pensions.

Value fluctuation reserves are financial buffers for poor stock market years or market disruptions. They help a pension fund absorb fluctuations on the financial markets.