Your employer has agreed that you have earned some time off. Hopefully, you were also informed that you can continue to be insured against the risk of death and disability through the pension fund for up to two years. You can even continue making savings contributions.
Time off is great. Even better if it's for more than one month. But there's a catch: if you take leave for one month or more, the savings contributions to the pension fund will be suspended. That may not sound like a big deal, but it also means you are no longer insured against death and disability. Certainly, we hope it isn't the case, but if you were to have an accident while on unpaid leave and you have not taken out supplementary insurance, you or your surviving dependants will only be entitled to the accrued second pillar vested benefits.
That is why it is a good idea to simply notify BVK of your leave ahead of time and pay the risk insurance in advance. For a gross annual salary of CHF 85,000, the contribution for one year would be approximately CHF 1,200. Sound like a lot? Not really, if you consider that you would receive a disability pension equal to 60% of your last insured salary. In this example, that would be around CHF 36,000 per year until you reach regular retirement age.
This supplementary insurance can be taken out for a maximum of two years. You can also continue your savings contributions during your unpaid leave at your own cost (i.e. you pay the employer as well as the employee contributions). Be sure to contact us well ahead of time for more detailed information. You must submit the relevant form to BVK at least one month before starting your unpaid leave.