Switzerland is one of the world's leading centres for insurance and reinsurance, and its occupational pension funds are among the largest investors in the country. The articles collected here explain the supervision of insurers and reinsurers by FINMA, the Swiss Solvency Test, captive insurance companies, the three pillars of the Swiss pension system and the investment rules for pension funds. They are written for insurance groups considering a Swiss presence, for companies setting up a captive, and for employers from abroad who need to understand their pension obligations towards staff in Switzerland.
Switzerland is a global centre for insurance and reinsurance, and its pension funds are among the largest investors in the country. Employers from abroad who hire staff in Switzerland must understand the three-pillar pension system to budget the true cost of employment and to meet their obligations from the first day of work.
The first pillar is the state old-age and survivors' insurance (AHV/AVS), financed by contributions from employers and employees. The second pillar consists of occupational pension funds, which are compulsory for employees above a certain salary threshold. The third pillar is private and voluntary, with tax-privileged savings in pillar 3a. Together, the three pillars are intended to preserve the accustomed standard of living in retirement.
An employer from abroad must register its Swiss staff with a compensation fund for social security and affiliate the company with a pension fund for occupational benefits. Accident insurance is also compulsory for employees. The employer pays at least half of the occupational pension contributions, which rise with the age of the employee and therefore affect the cost of hiring experienced staff.
For businesses themselves, Switzerland offers a deep insurance market. International groups use Swiss insurers and reinsurers for property, liability and credit risks, and some establish a captive insurance company to retain part of their own risks. FINMA supervises insurers and reinsurers and applies the Swiss Solvency Test to assess whether their capital is sufficient for the risks they carry.
The articles explain the supervision of insurers and reinsurers, captive insurance companies, the three pillars of the Swiss pension system and the obligations of employers towards staff in Switzerland.
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