When your working life ends too early

Age-related dismissal

Not every working person is lucky enough to be able to work all the way up to retirement. If this happens after the age of 58 and your employer has chosen the «age-related dismissal» option, a pension may be paid out in certain circumstances.

The employment market is tough, particularly when older employees lose their jobs through no fault of their own. You often hear people talking about the practical impossibility of finding a job over the age of 58. That is why BVK offers the option of «age-related dismissal», which employers can have included in their contracts. A pension that would have been owed if the employee had made savings contributions until the age of 65 is calculated on the basis of the insured salary. The employer pays the remaining contributions in full.

But you should check your insurance certificate from BVK and your employer's HR regulations before you get too excited about this «subsidy». You can thus find out the conditions under which you will be entitled to benefits due to age-related dismissal.

Example calculation of a pension under the «Norm» model: age-related dismissal at the age of 59 (born in 1965)

Insured salary: CHF 80,000
Annual savings contributions (29% of 80,000): CHF 23,200
Accumulated savings upon dismissal: CHF 511,160
+ future savings until the age of 65 (7 × 23,200): CHF 162,400
= definitive savings: CHF 673,560
Pension p.a. (Conversion rate of 3.94% × 673,560): CHF 26,538.25

As AHV benefits are not paid out until normal AHV retirement age is reached, an application can be submitted to BVK for bridging benefits. The Compensation Office will provide information on the obligation to make AHV contributions. BVK does not deduct any AHV contributions from old-age benefits.

You can, however, also choose a pension model («Dyna», «Kombi» or «Plus»), or take out your savings as a lump sum («Flex» model). Please note that BVK must be notified of your choice at least a month before you retire. You can find the «Application for old-age benefits» form here.

It would, of course, be better if you could have your savings transferred to another pension fund following your age-related dismissal because you have found another job.