FAQ

In the case of pension schemes applying the defined contribution principle, benefits are dependent on the amount of contributions paid. Hence, the benefits are calculated individually for each member on the basis of the sum of all contributions paid by the member and the employer throughout the contribution period (including interest). The contributions are stipulated by law or by the respective pension scheme’s benefit rules as a percentage of the insured salary. The General Electric Switzerland pension schemes apply the defined contribution principle to their calculation of the retirement benefits. The risk benefits are calculated on the basis of the defined benefit principle whereby the benefits are dependent on the insured salary.

The value fluctuation reserve serves to mitigate price fluctuations that affect asset investments. This is to ensure that pension schemes do not become underfunded due to short-term fluctuations on the financial markets. The formation of value fluctuation reserves is required by law.

The technical interest rate is a mathematical factor. It is used to calculate the future interest on a pension over its entire term. The interest rate depends on the expected development of the financial markets. Until the end of each liability, the pension scheme must generate a return that is as high, or higher, than the specified technical interest rate. Ideally, the latter should therefore be determined such that it is covered by the effective return on assets generated in the long term. This must be achieved if the technical interest rate is to be retained over an extended period of time and is to fulfil the purposes of a guarantee.

The conversion rate is the percentage of the saved-up capital that is paid to pensioners each year in the form of a pension. The determination of the conversion rate is thus closely related to the life expectancy of the respective generation of pensioners. Current pensioners are not affected by changes in the conversion rate.

The coverage ratio indicates the ratio between the scheme’s assets (including the value fluctuation reserve and disposable assets) and its liabilities towards active members and pensioners.

The Board of Trustees determines the interest rate every year. Should the annual financial statements report disposable assets, the Board of Trustees may decide upon additional interest as per the end of the year. In the case of underfunding, interest on the entire savings capital may be reduced and may even be zero.

The interest on the members’ savings capital represents a liability for the Pension Fund. The generated return must also cover other liabilities, such as death and disability benefits, reserves (due to excessive conversion rates or rising life expectancy) or administrative and asset management expenses.

Members of the General Electric Switzerland pension schemes may choose between 3 contributions tables: Standard, Standard plus and Standard minus

• Under the Standard plus contributions table, members voluntarily pay higher contributions per month, thereby increasing their savings capital. This also increases their retirement pension.
• Members may opt for the Standard minus table at a time in life when they are not in a position, or do not wish, to pay high contributions. However, lower contributions also mean lower retirement benefits. Such losses may be offset by a subsequent switch to the Standard plus table.
• Members may switch contributions table on a monthly basis.
• Where members fail to specify a contributions table, they automatically pay the contributions under the Standard table.

The death and invalidity risk insurance remains the same in the case of all contributions tables. The employer’s contributions are always based on the Standard table irrespective of the member’s option.

Yes. By submitting a written notification specifying the respective name, address and date of birth, members may register their partners with the pension schemes, thereby covering them for the event of an emergency.

When members leave the company, their savings capital becomes due in the form of a 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. Where members have a new employer, the capital is transferred to the new pension scheme. In all other cases, the capital is transferred to a vested benefit account or a vested benefit insurance policy. Cash payments are only possible in specific cases. The transfer is effected as per the end of the month in which the member leaves the company or once all relevant documents have been received at the end of a month.

• Early retirement: between ages 58 and 62.
• Flexible retirement: between ages 63 and 65. In the case of flexible retirement, a bridging pension is paid until age 65.

Characteristics of a pension: The pension will be paid every month until death. In the event of death, benefits are paid to surviving dependents on a regular basis in accordance with the Benefit Rules. The retirement pension is fully taxable. It is adjusted to inflation in line with the Pension Fund’s financial capabilities.

Characteristics of lump-sum payments: The lump-sum payment is effected once and is subject to a reduced tax rate upon withdrawal. All claims against the pension schemes expire upon payment of the lump sum. Hence, full responsibility for the management and apportionment of the assets devolves to the pensioner. In the event of death, surviving dependents have no claim to benefits provided by the pension schemes; however, they receive the portion of the lump-sum payment that had not been used upon the member’s death.

Hybrids: Members may also opt for hybrid forms of the above options, i.e. they may withdraw a portion of their savings capital as a lump sum and draw the remainder as a monthly pension.

The savings capital held by members who receive disability benefits remains with the pension schemes. Based on the last insured salary, savings credits including interest continuously increase the capital until retirement age. Once the member has reached retirement age, the claim to disability benefits expires and the member receives retirement benefits. The benefits are calculated on the basis of the increased savings capital.

In the case of partial disability, the savings capital accrued upon occurrence of the disability is apportioned in line with the pension level. The savings capital consistent with the active portion continues to increase similar to that of fully employed members; the remaining portion increases as described above.

Insurance certificates as at 31 December are sent out each February/March of the following year. They show the development of the savings capital during the past year. Current certificates may be generated on the online portal at any time or may be posted during the year on request.

In each tax return, voluntary payments (made for the purpose of increasing retirement benefits and for early retirement) can be deducted from income up to the maximum buyingin limit under the law or the pension fund’s rules for the respective year only. In the case of a lump-sum payment upon retirement, a reduced tax rate applies.

Please note: According to the tax authorities, once a buy-in has been effected, members may not opt for a lump-sum withdrawal for three subsequent years. This also applies to the savings capital accrued before the buy-in. Under applicable pension laws, it is possible to withdraw savings capital from the time before the buy-in even during the three-year lock-up period. However, the tax authority may not accept the withdrawal. Members should clarify, and are fully responsible for, the fiscal consequences of their buy-ins and any lump-sum withdrawals.