Organisation of occupational pension funds
Occupational benefits institutions must properly carry out occupational benefits provision. This is a legal requirement. Occupational benefits institutions are managed on a joint basis and are overseen by state authorities.
Implementation
The institutions that implement occupational pension schemes pursuant to the terms of the LPP must be registered. Overall management is the responsibility of a joint administration body, i.e. the managing body must include as many representatives of employees as of employers, having the same rights. The insured elect their representatives directly or by proxy (delegates). The obligation to inform is particularly important. The pension fund must each year inform its members of their rights relative to benefits, on the coordinated salary, contribution rates, their old age assets, on organisation and financing, as well as of the members of the joint management body. Insured persons may request to see the annual accounts and the annual report. Moreover, the institution must inform the insured who request it of return on capital, the evolution of actuarial risk, administrative costs, the principles according to which the cover capital is calculated, additional provisions, and the degree of coverage, pursuant to Article 86b LPP.
Supervision
An auditor shall annually audit the management, accounting and financial position of the occupational benefits institution. An accredited pension actuary will assess from an insurance perspective whether the occupational benefits institution can meet its obligations at all times.. Cantonal surveillance authorities check that pension funds comply with legal provisions and regulations. The supreme surveillance body is the occupational pension funds supervisory committee.
Suppletive institution
There are two special institutions to second the ordinary ones: the guarantee fund and the auxiliary fund. The suppletive institution ("institution supplétive") insures employees whose employer is not affiliated with any officially registered pension scheme. It also insures those who wish to do so on an optional basis - the self-employed, for example - as well as those who are no longer affiliated with any other pension fund. Finally, it insures the recipients of unemployment compensation against the risk of death or disability. Financing is provided by the parties involved.
Guarantee fund
The guarantee fund ("fonds de garantie"), is financed by the contributions of all pension funds. It subsidises institutions with an unfavorable age structure. The fund also guarantees statutory benefits owed by insolvent pension funds. However, the guarantee in the event of insolvency only covers benefits that are not more than one and a half times the upper limit of the insured salary; in other words, benefits are paid only to the amount of CHF 129'060 until 2022, CHF 132'300 until 2024 and CHF 136'080 from 2025.
Funds providing “over-obligatory” benefits
Many occupational benefits institutions offer benefits that gobeyond the compulsory benefits defined by the LPP. In this case we speak of “over-obligatory” schemes, or pillar 2b.