As of 1 January 2025, the increase in the maximum AVS pension, now set at CHF 30,240, leads to a series of adjustments in professional pension figures.
These changes reflect the need to adapt the pension system to current economic realities to ensure its sustainability while maintaining adequate coverage for insured persons. Here is a detailed overview of the new amounts and their implications for the insured.
Among the adjustments related to the increase in the maximum AVS pension, the entry threshold for occupational pension (LPP) has been raised to CHF 22,680. This threshold defines the minimum income from which an employee is mandatorily affiliated to the LPP. Its increase could lead to the exclusion of some low-wage workers, particularly those in part-time jobs, thus depriving them of LPP contributions and, consequently, of retirement savings accumulated through occupational pension. For these insured persons, it becomes essential to consider other savings solutions, such as the 3rd pillar, to compensate for this lack of coverage and ensure sufficient income upon retirement.
The amount of the coordination deduction has also been adjusted, now set at CHF 26,460. This deduction corresponds to the portion of the salary that is not taken into account in the calculation of the insured salary by the LPP. Its increase, coupled with the re-evaluation of the coordinated salary, allows the contribution base to be adapted to economic developments without reducing the contributions of the insured.
Furthermore, the upper limit of the annual insured salary has been raised to CHF 90,720. This ceiling represents the maximum income considered within the framework of mandatory occupational pension. By raising this limit, the system ensures that higher salaries benefit from more extensive coverage, thereby enhancing the accumulation of retirement capital for higher-income workers. These adjustments aim to ensure a pension system more adapted to current economic realities and to maintain a balance between contributions and future benefits.
Since 1 January 2025, the threshold amount for 1E in occupational pension has been raised to CHF 136,080. This change can impact some high-income employees who benefit from a supplementary pension plan, allowing them greater flexibility in managing their retirement savings. By increasing this threshold, employers and affected insured persons have a wider margin to invest in strategies tailored to their risk profile, potentially offering better returns for their pension capital. This modification aims to enhance the attractiveness and efficiency of the Swiss pension system by offering more personalisation to the insured.
It should be noted that the Federal Council has launched a consultation on an amendment to the Vested Benefits Act. This reform aims to offer affected insured persons the possibility, for two years, to transfer their pension assets from a 1E plan to a vested benefits institution. This would allow them to maintain similar investments and avoid potential losses in the event of a change of employer. Currently, the legislation requires the full transfer of vested benefits to the new employer's pension fund.
The maximum insurable salary has seen a significant increase, reaching CHF 907,200.
This extension offers senior executives and managers the possibility to cover substantial amounts, enhancing their financial security while benefiting from tax advantages related to pensions. This represents a strategic opportunity to optimise personal taxation but also involves higher contributions. Additionally, managing these significant amounts requires particular attention in terms of investment diversification and risk management.
The adjustment of pension figures also impacts the contributions to the tied pension plan 3A. Employees whose income is subject to AVS and LPP contributions can contribute up to CHF 7,258. However, those whose income is subject to AVS but do not contribute to the LPP can contribute up to CHF 36,288.
To easily find these amounts, simply apply a straightforward formula: multiply the maximum AVS pension by 3, then by 8% to get the small 3A contribution (30,240 × 3 × 8% = 7,258) or by 40% for the large 3A (30,240 × 3 × 40% = 36,288).
It may be wise to check the impact of these changes on projected retirement benefits and consider additional savings solutions if necessary.
For more information, feel free to schedule an appointment with one of our wealth management specialists.