Offering a professional pension solution is much more than a legal obligation: it is a concrete lever for enhancing a company’s HR policy and strengthening its attractiveness. In a context where candidate expectations are evolving and competition for talent is intensifying, the pension scheme can become a real recruitment and retention asset – provided its intricacies are well understood. Here are five practical tips to fine-tune a pension strategy.
Need to review the basics of the Swiss pension scheme (LPP)? Visit the OFAS (Federal Social Insurance Office) page: Understanding Professional Pension Schemes (LPP).
1. Adopt a holistic approach
Companies have great flexibility in choosing their professional pension solution and can offer an attractive plan to their employees. However, simply defining a plan is not enough. It is essential to take into account the pension fund that implements the plan, as it plays a decisive role in choosing the solution.
What to pay attention to?
The conditions within pension funds evolve over time. Understanding the different comparison criteria between these funds allows for a more precise evaluation of the most suitable solution.
2. Don’t underestimate the remuneration of assets
The performance of a pension fund is not measured solely by its risk premiums, fees, or conversion rates. Significant differences in the remuneration of retirement savings exist between institutions and can substantially influence the amount of savings accumulated in the long term.
The stakes?
Over a 20-year period, the difference between a remuneration rate of 1% and 3% can represent hundreds of thousands of francs. With the same profile, two individuals will accumulate different savings depending on the performance of their pension fund.
3. Pay attention to conversion rates
The conversion rate – which converts accumulated savings into retirement annuities – varies from one pension fund to another and directly influences the amount of annuity received in retirement.
Our advice:
Integrate this criterion from the outset when selecting a provider, taking into account the typical profiles within your company. This rate can also evolve, so it is worth monitoring its trajectory over time.
4. Look beyond the cost
A pension fund with attractive premiums does not necessarily mean it is performing well. Price alone does not tell the whole story.
The right approach?
Also evaluate the quality of service, the transparency of information, the HR tools provided, and the investment strategy.
5. Align the pension scheme with your HR reality
A good pension plan is primarily one that is tailored to your population. Age structure, salary evolution, internal mobility: each company has its own specificities, and these deserve a bespoke solution.
What makes the difference?
Design a plan that supports professional journeys and remains relevant at each stage of your teams’ lives.
There is no one-size-fits-all solution when it comes to professional pensions, but a multitude of possible combinations to meet the realities of each company. The wealth of possibilities – both in terms of plans and pension funds – allows for the creation of tailored solutions. Every parameter needs to be analysed: coverage degree, remuneration, conversion rates, plan definition, risk premium and fee levels, buyback options, and investment strategy. This is also what makes this pillar of our social system complex – and valuable. Professional pension schemes require a careful, strategic, and often technical understanding. But when well thought out, they become a distinctive HR advantage, appreciated by both management and employees.
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