General Electric Switzerland pension schemes
General Electric Switzerland pension schemes – securing your future.
Security built on three pillars
Switzerland’s pension system is based on three pillars: AHV/IV state pensions, occupational pensions and private pensions. This ensures that your standard of living is maintained in old age and in the event of disability or death, both with respect to yourself and your surviving dependents.
The three pillar policy
The keystone: AHV/IV (1st pillar): AHV (old age and survivors’ insurance) covers the subsistence needs of the members or their surviving dependents in old age or in the event of death. Integrative measures or cash benefits under disability insurance (IV) secure the members’ livelihood in the event of disability. AHV/IV is a mandatory insurance plan for all persons working or living in Switzerland.
Consistent standard of living thanks to occupational pension plans (2nd pillar): In conjunction with AHV/IV, occupational pension plans ensure that your standard of living will not drop once a claim for benefits arises. At General Electric Switzerland, the 2nd pillar is covered by the Pension Fund and the Supplementary Insurance Plan.
Private pensions (3rd pillar): The 3rd pillar allows our members to fulfil their personal wishes. There are no restrictions regarding members’ choice of provider and savings amount. Limits apply to the tax-privileged portion 3a, and the capital may be withdrawn in particular cases only. No limits or requirements apply to pillar 3b. Assets invested in this portion are disposable at any time.
The HR department must be notified of all births. Whether or not members have children is of no significance to the pension schemes until a claim for benefits arises (e.g. orphan’s pension).
Members are obliged to notify the HR department of any change of address. It will forward this infor-mation to the Pension Fund.
Voluntary buy-ins: Upon prior application, members may make payments to the Foundation at any time for the purpose of increasing their pension benefits. Please note: Advance withdrawals for residential property must be repaid prior to any buy-ins.
Buy-in potential: Calculated by the pension scheme. A simulation of the buy-in potential can be generated on the online portal.
Withdrawal of buy-ins: Where members have effected buy-ins, they may not withdraw the respective amount in the form of a lump sum for the subsequent three years. According to a decision passed by the Federal Court in 2010, this also applies to the accrued savings capital. This rule is intended to prevent members from temporarily shifting funds for tax reasons. Under applicable pension laws, it is possible to withdraw savings capital accrued before the buy-in even during the three-year lock-up period. The General Electric Switzerland Pension Fund and Supplementary Insurance Plan follow the provisions of the pension laws. However, the tax authority may not accept the withdrawal.
Additional early retirement account: Members may offset the reduction in benefits in the case of early retirement by making payments to an additional account. Such payments cannot be made before the regular buy-in potential has been exhausted.
Fiscal consequences: Members must clarify, and are fully responsible for, the fiscal consequences of their buy-ins and any lump-sum withdrawals.
Withdrawals: While members are employed by General Electric (Switzerland) GmbH, advance with-drawals may exclusively be made in respect of owner-occupied residential property.
Death benefit: Surviving dependents are entitled to a death benefit. The latter consists of the net savings capital (savings capital less personal buy-ins including interest), less the cost of financing the survivors’ benefits; however, at least 100% of the insured salary. The total personal buy-ins including interest will be paid on top of this.
Beneficiaries: Members may determine the share of the death benefit that each person in the different beneficiary groups will be entitled to. They must lodge a respective written declaration with the pension schemes before their death. The ranking of the beneficiaries is specified in the Rules of the Pension Fund.
Payment of pensions: The HR department informs the pension schemes in the event of the death of an employee. The death benefit and the spouse’s and orphan’s pensions are paid as soon as the pension schemes have received the required documents, such as list of heirs, birth certificates of the children, confirmation that they are in fulltime education, etc.
Spouse’s pension: Surviving spouses are entitled to a spouse’s pension if they are supporting one or several children under the age of 25, or are at least 40 years of age. Registered same-sex partners are placed on an equal footing with spouses. The spouse’s pension amounts to 36% of the insured salary in the Pension Fund or 39% of the insured salary in the Supplementary Insurance Plan.
Orphan’s pension: All children who are entitled to a pension have the right to claim an orphan’s pension in the amount of 20% of the full disability or retirement pension.
Vested benefit: All members are entitled to receive their vested benefit. For this purpose, the pension schemes contact the member who is obliged to provide it with details of the account to which the vested benefit should be transferred. The vested benefit is consistent with the savings capital accrued upon departure.
Member has new employer: The vested benefit is transferred to the new employer’s pension scheme.
Member does not have a new employer: The vested benefit is transferred to a vested benefit account or used to take out a vested benefit insurance policy.
External membership: Members leaving the company may remain with the Foundation as long as they have not joined a new employer’s pension scheme. In this case, they pay both the employee’s and the employer’s contributions. A further option consists of continued insurance free of premium in which case, however, the savings capital will not increase.
Cash payment: Possible in cases whereby members become selfemployed or leave Switzerland. Where members move to a EU country with mandatory social insurance, only the portion beyond the obligatory part can be withdrawn. The obligatory portion is transferred to a vested benefit account or a vested benefit insurance policy in Switzerland or the Principality of Liechtenstein.
Entitlement: Members who are at least 40% disabled according to the Federal Disability Insurance Scheme (Eidgenössische Invalidenversicherung, IV). Members must have been insured with the Foundation upon occurrence of the incapacity to work which caused the disability. Until the Pension Fund benefits commence, the employer is obliged to pay a continued salary and the member is entitled to health or accident insurance benefits.
Pension amount: Depends on the degree of disability according to the IV. The full disability pension is equal to 60% of the insured salary in the Pension Fund or 65% of the insured salary in the Supplementary Insurance Plan. The full disability pension is payable to members with a disability degree of 70% or above.
Partial disability: The savings capital is apportioned in line with the pension level. The savings capital corresponding to the active portion continues to increase similar to that of fully employed members.
Division: Principally, the savings capital saved up by the spouses throughout their marriage is divided in half. The same applies in the event of the dissolution of a registered partnership.
Procedure: Upon request, the pension schemes issue a declaration of feasibility to the respective member. The declaration specifies the member’s financial pension status before the divorce. Subsequently, due to the declaration, the court automatically forwards the divorce decree to the pension scheme, specifying the amount of the spouse’s claim to vested benefits. The pension scheme then transfers this amount to a vested benefit account or to the spouse’s pension scheme.
Buy-back: Members may offset the amounts transferred to their spouses upon divorce by making voluntary payments to the Pension Fund and the Supplementary Insurance Plan.
Entry: Upon contractual commencement of employment, but no earlier than age 18. In principle, all employees whose employment exceeds three months and whose annual salary exceeds the minimum salary under the BVG join the Foundation.
Scope: Between the ages of 18 and 25, insurance is restricted to the risks of disability and death; thereafter it also includes the retirement pension.
Contributions: Each year, members may choose between three contributions tables: Standard, Standard plus and Standard minus.
Condition: Savings capital may be used to acquire owner-occupied residential property up until age 62.
Advance withdrawal: Until age 50, the entire savings capital may be withdrawn. Withdrawals effected thereafter may not exceed the savings capital as per the age of 50 or half of the effectively accrued savings capital. The minimum advance withdrawal is CHF 20,000. Advance withdrawals can be made every five years.
Consequences: Advance withdrawals reduce the retirement benefits and the risk benefits that depend on the accrued retirement assets. The capital withdrawn is subject to taxation. Advance withdrawals can be repaid. The minimum buy-back is CHF 10,000. Where advance withdrawals are repaid, the tax that has been paid on the withdrawals will be refunded without interest.
Pledging: Instead of withdrawing their assets, members may also pledge their Pension Fund assets to a bank. Since pledging does not lead to a withdrawal of assets from the Pension Fund, full benefits remain insured.
Beneficiaries: Unmarried partners who are not related under marriage law. Further conditions: they must be 40 years of age or above, have lived with the deceased member for at least five uninterrupted years before his/her death and started their relationship with the member before the member reached the age of 60.
Amount: As spouse’s pension. The partner’s pension is reduced by any current spouse’s pensions.
Registration: Members must register their partners with the pension scheme before their death. This must be done in writing.
Application: The application for a partner’s pension must be submitted within three months of the insured member’s death (see also the section on Death).
Retirement age: 65. A six-month notice period applies.
Early retirement: No earlier than age 58. Early retirement is connected with lower pension payments. Members retiring between the ages of 63 and 65 receive a bridging pension which is limited to the maximum annual AHV retirement pension multiplied by two. On request, members may draw a bridging pension as of their 62nd birthday. In this case, the bridging pension will be spread accordingly over the longer drawing period.
Partial retirement: Requires the employer’s approval.
Postponed retirement: Retirement can be postponed until, but no later than, age 70 if the employer agrees.
Retirement benefits: In the Pension Fund, the savings capital may be drawn as a pension or withdrawn as a lump-sum payment. Hybrid forms are also possible. In the Supplementary Insurance Plan, the savings capital must be drawn as a lump sum in all cases. All claims against the Pension Fund and the Supplementary Insurance Plan expire upon payment of the lump sum. The Pension Fund must be notified of the impending lump-sum withdrawal no later than six months before retirement.
Calculation of the retirement pension: The retirement pension is calculated upon retirement on the basis of the accrued savings capital and the conversion rate. The conversion rate is determined by the Board of Trustees and is specified in the Benefit Rules. At the time of their retirement or the drawing of their retirement pension, members have the option of increasing or reducing the socalled vested spouse’s pension. In this case, the members’ retirement pension will be increased or reduced accordingly during their lifetime.
The HR department informs the pension schemes directly of any salary adjustments. The pension schemes include the new figure in its calculation of the pension benefits.
- The insured salary is equal to the monthly salary multiplied by 13 less the coordination deduction (CHF 25,095).
- Members can verify the amount of their insured salary by accessing their insurance certificate on the online portal.
- The maximum annual salary insured by the General Electric Switzerland Pension Fund amounts to CHF 103,965 (maximum gross salary of CHF 129,060 less coordination deduction of CHF 25,095). Salary components in excess of this amount are covered by the General Electric Switzerland Supplementary Insurance Plan.
- The entry threshold applying to insurance by the Pension Fund amounts to CHF 21,510. Salary components in excess of CHF 240,000 are also insured in the Top Management Plan.
Since January 2019, the assets of the active members have been invested in five different investment strategies.
Depending on their risk propensity, members can choose their individual strategy from a total of five investment products. The Supplementary Insurance Plan does not offer any fixed interest rate and the profit/loss risk is borne by the members. In return, they fully participate in the financial market trends along with the opportunity to earn higher long-term returns.
Members must notify the HR department of weddings or registrations of same-sex partnerships. It will forward this information to the pension schemes.