Disability benefits in occupational pension plans
Occupational benefits plans provide disability benefits to insure financial security for members in the event that they become unable to work due to illness or an accident. These benefits supplement those provided under the first pillar and are based, among other things, on the degree of disability.
Disability insurance
In the event of disability under the terms of the DI, resulting from an accident or illness, the pension fund pays the insured party a disability pension, and a children's pension if applicable. The pensions continue to be paid when the insured party reaches retirement age.
The disability pension is calculated by extrapolating the final old age assets: the sum of old age bonuses to be generated in years to come is added to the old age assets acquired when entitlement to the pension sets in (without interest).
This amount is then multiplied by the minimum conversion rate set by the LPP/BVG to calculate your disability pension.
Overview of the compulsory LPP/BVG benefits
Disability pension
To be eligible for a LPP/BVG disability pension, the degree of disability must be at least 40%.
If the degree of disability is 70% or more, the member is entitled to a full pension.
If the degree of disability is between 69% and 50%, the pension is proportional to the degree of disability.
If the degree of disability is less than 50%, the following percentages apply:
The annual disability pension corresponds to 6,80% of the extrapolated old age assets since 2014.
Child's pensions
Members who are entitled to a disability pension are also entitled to a child’s pension for each child who would be entitled to an orphan's pension at their death. The pension is paid until the child turns 18, or until the child turns 25 if he or she is still in education.
The child’s pension is equal to 20% of the disability pension.
Special case: Cash benefits /capital
In the event of disability, a one-time lump-sum payment may be possible if the pension plan regulations allow it.