Egalia, Partners

About

Pension Funds & SMEs

For an SME, the LPP plan is the largest promise made in the smallest print.

Every employer in Switzerland must provide a second-pillar pension for its staff. Egalia Partners designs, benchmarks and governs that plan for small and medium enterprises, independent of the insurers and foundations that price it.

How the Swiss pension system works

Retirement income in Switzerland is built from three separate systems, each funded and governed differently. For an SME, only one of the three is something the employer actively designs, the occupational pension. The other two set the floor and the ceiling around it.

6.40%

Employee-side AHV, disability insurance and unemployment insurance contributions withheld from every Swiss salary, before LPP and tax. Source: ahv-iv.ch, sheet 2.01.

AHV / AVS, the state pension

Funded pay-as-you-go and paid to everyone with a contribution record. After a full 44-year career, the annual pension runs from CHF 15,120 at minimum to twice that at maximum, and up to CHF 32,760 for 2026 following the introduction of the 13th AHV payment.

LPP / BVG, the pension an SME provides

Mandatory for every employer once an employee crosses the legal entry salary. Contributions accrue on the coordinated salary at rates set by age, and the resulting capital is paid as a lifelong pension, as capital, or as a mix of both. This is the pillar an SME actively funds and governs.

Pillar 3a, the voluntary complement

A personal, tax-privileged account outside the mandatory system, capped at CHF 7,258 a year for 2025 for employees already affiliated to a pension fund. We treat it as an individual decision to model, never a default to assume.

LPP bonification credits rise with age

Age bracket

Bonification rate

Note

Under 25

No mandatory LPP savings credit

25 - 34

Entry accrual bracket

35 - 44

10%

Mid-career acceleration

45 - 54

15%

Approaching peak accrual

55 and over

18%

Peak accrual, largest buyback capacity

Coordinated salary is the portion of income between the statutory coordination deduction and the LPP ceiling of CHF 90,720 (2025 mandatory minimum). Source: Pension Bratwurst, Swiss Replacement Rate Index methodology.

Independent advisory

An advisor between your SME and its pension foundation, not employed by either.

Insurers, collective foundations and asset managers each price the plan they sell. Egalia Partners sits on neither side of that table. We are paid an explicit mandate fee, never a retrocession, and every recommendation is documented before it is proposed. For pension funds and SMEs, that independence is the product: benchmarking your existing plan, structuring contributions and benefits, and applying the BWP Compass© method to the decisions your management team keeps deferring.

Pension Bratwurst, the Swiss Replacement Rate Index

The Swiss Replacement Rate Index (SRRI) measures the ratio between the first year of net retirement income and the last year of net working income, for the same household. Pension Bratwurst simulates a full working life and a full retirement, day by day, across five income levels and all 26 cantons, to show where that ratio comes under pressure, and why.

70%

The replacement-rate threshold below which the index treats the drop in living standards as significant. A full career of contributions can still leave a meaningful income gap at retirement.

Methodology

Parameter

Basis

Detail

Career horizon

Age 22 to 65, then to 91

A full uninterrupted career, retirement modelled to average life expectancy at 65 (26 years)

Salary basis

FSO Earnings Structure Survey

5 income percentiles, 3 age cohorts, projected at 0.8% nominal growth a year

AHV pension

Scale 44, full career

CHF 15,120 to CHF 32,760 a year, indexed to a mixed wage and price index

LPP pension

Legal minimum bonification table

Capital credited using a return derived from the Pictet CH LPP 25 fund; supra-mandatory plans excluded

Tax and premiums

26 cantonal tax grids, FOPH premiums

Capital withdrawal taxed at one fifth of the normal rate; premiums grow 3.5% a year, unindexed after retirement

Aggregation

Population-weighted, 26 cantons

FSO 2023 resident population, published across 5 income percentiles

The model is deliberately conservative. It assumes an uninterrupted career, a single canton of residence for life, no post-retirement indexation of AHV or capital pensions, and the mandatory LPP minimum only, without the supra-mandatory plans common in practice. Pillar 3a is excluded from the published index for the same reason it is optional: a choice, not a system benefit.

How we handle plan design and investment strategy

Once the benchmark is complete, four decisions shape the plan going forward. Each is documented, priced and reviewed on a fixed calendar, not left to renew itself by default.

Foundation selection

Collective, semi-autonomous or fully autonomous. We compare funding ratios, cost structures and investment mandates across foundations before recommending where your plan should sit, and why.

Contribution and benefit design

Bonification rates above the legal minimum, the coordinated salary structure, and death and disability cover are modelled against your payroll and your competitive position for talent, not fixed at the legal floor by default.

Investment strategy and benchmarking

Return expectations are benchmarked against indices such as the Pictet LPP fund family used in the Swiss Replacement Rate Index, matched to the plan funding horizon and reported on a quarterly, full look-through basis.

Governance and employee communication

An annual Assess, Advise, Audit cycle, the same protocol behind the BWP Compass© method, applied at plan level: a funding-ratio review, a documented decision log, and a plain-language session for staff on the biases that make people postpone their own retirement planning.

Proprietary methods

BWP Compass©, BWP Profiler©, BWP Bias Map©, BWP Protocol© and BWP Score© are proprietary methodologies developed and owned by Egalia Partners. Every Senior Partner who applies them is certified internally against a fixed standard: initial training, supervised practice cases, an examination, and an annual audit of client files. © 2026 Egalia Partners. All rights reserved. Reproduction without written permission is prohibited.

Begin with a plan benchmark, not a pitch.

A pension plan review takes one meeting. We benchmark your current foundation, contribution structure and costs against the market, and tell you plainly where you stand before any recommendation follows.

Egalia, Partners

Rue de Lausanne 67, 1202 Genève, Switzerland

Egalia Partners is independently regulated in Switzerland, affiliated with ARIF and supervised under LSFin/LSA.

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