BVG/2nd pillar insurance coverage

Finance, Taxes, Banking, Insurance and Retirement
1

Hi All,

Background: Somebody i know (a swiss person), qualified for IV (invalidity) insurance. He was working as a full time employee with unlimited contract. He is now close to retirement age of 65. He is now drawing benefits from IV and no longer working.

He recently received written letter from the “BVG” office stating he is now entitled to a lumsum payment (on top of this BVG payment when he retires).

He tells me that this one-off insurance payment applies to people going into IV category and is paid through the BVG office.

I did not know about this ‘BVG’ insurance and would like to ask the forum for information and details around this insurance.

I have many questions, like:

  • how does this insurance work?
  • are the premium for this insurance part of the normal BVG contribution?
  • How is the payment calculated? As in, based on salary? length of contribution? How much money was contributed to BVG? etc.
  • will this insurance make BVG payments for him, until he retires?
  • Will the lumpsum payment be ‘deducted’ from his BVG benefits, after he retires?
  • Is this insurance ‘optional’? As in, does it depend on the BVG benefits the company offers? Is this automatic? mandatory? etc…
  • etc. etc.

I would like to learn about this as much as possible.

TIA!

2

I received exactly this type of payment. I wish I could answer your questions, but I generally can’t, though there were no subsequent deductions. I tried at the time to understand the system but gave up. His pension fund should have the answers. The good news is that the payments can be higher than expected - the insurance schemes in Switzerland are sometimes generous.

1 Like
3

Thanks kiwisteve.

That has also been my experience when i asked around. Seems like this is a gray area that people either do know know or are not well informed. The insurance companies tend to provide very limited info, other than what they write in their written communication with the implication ‘this is what you get. dont ask. dont make waves.’ )

4

IV insurance is certainly deducted from your 2n pillar premiums. Check your 2nd pillar annual statement, you’ll see how much from your contributions goes to the actual pension pot, how much to the IV.

The IV seems very generous, that’s why you have to provide the health questionnaire when subscribing to a new pension institution (changing job, collective agreement to change insurer), if you have preexisting conditions you’re have a waiting period - sh* happens during the waiting period and you get null/nada/niento