Guide to the second LPP pillar in Switzerland (cross-border guide)

Context

In a nutshell

The guide to the second pillar LPP describes contributions, levying, gap redemption and social security planning in Switzerland, with a particular focus on the canton of Bern and the national comparison. This guide was created to help border guards understand how the second LPP pillar works.

Introduction

The second pillar LPP (Secondary Pension Pillar) is a supplementary pension system introduced in Switzerland in 2015. Its objective is to complete the social security coverage of the Swiss, providing an additional source of income in old age. The guide below describes in detail the mechanisms of the second LPP pillar, with a particular focus on the canton of Bern and the national comparison.

Contributions

Contributions to the second LPP pillar are mandatory for all Swiss who have a working income. The contribution share is set at 6% of labour income, which is split in half between worker and employer. For example, if a worker earns CHF 80,000 per year, their contribution to the second LPP pillar will be CHF 4,800 per year (6% of CHF 80,000).

Withdrawal

The withdrawal of the second LPP pillar is regulated by federal rules. The levy is calculated on the basis of working income and length of working career. For example, if a worker has a working career of 30 years and a working income of CHF 80,000 per year, his withdrawal to the second pillar LPP

Key points

Guide to the second LPP pillar in Switzerland

Introduction

If you're a frontier worker in Switzerland, chances are you've already heard of the second pillar LPP (Work, Pensions, Social Security). This system of contributions and levies was introduced in 2013 and aims to ensure stronger social security for all Swiss citizens. In this article, I will provide you with a comprehensive guide to understanding how the second LPP pillar works and how you can use it to plan for your retirement.

How the second LPP pillar works

The second LPP pillar is a system of contributions and levies that is added to the first pillar, that is, the compulsory pension system (SPP). The second pillar is voluntary and allows Swiss citizens to contribute independently to their pensions. Contributions are paid by workers and their employers, and are intended to fund future pensions.

What you need to know to plan for your retirement

To plan your retirement with the second LPP pillar, you need to know a few key things:

• Your contribution profile : You need to know how many contributions you've made and when. This will help you understand how much money you have already accumulated for your pension.
• Your Social Security Needs : You need to assess your future social security needs, taking into account your age, work activity, and life expectancy.
• The

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