Job search: old-age provision is often forgotten

AXA Investment Managers (AXA IM) conducted a representative online survey among 1,200 people aged 18 and over between May and June 2022. Ultimately, 949 employed Swiss men and women responded. The responses show that interesting work content is the most important criterion when looking for a job, followed by likeable colleagues and a high salary. The company culture, the image of the employer and the commute to work are also relevant.

Only 40 percent inquire about PF benefits when looking for a job

In order to secure financial independence in old age, the second pillar, i.e. the pension fund, plays an important role, as a significant part of the future retirement pension is to be paid from it. Depending on the pension fund, one has better or worse prospects of a carefree retirement. Nevertheless, according to the AXA IM survey, pension fund benefits rank 7th out of a total of 12 important decision-making criteria.

Around 40 percent of respondents said they explicitly ask about pension fund benefits during job interviews, with men, older people and people with high purchasing power bringing this up more frequently than women, younger people and people in a low purchasing power bracket. "When negotiating salaries with a potential employer, it is advisable to consider not only the salary, but also the pension fund contributions and benefits. These are virtually part of the total financial compensation and have a significant influence on the amount of the future retirement pension," says Daniela Bräm, pension fund specialist at AXA Switzerland.

Considerable differences depending on the pension fund solution

While some companies only contribute the legally required 50 percent of retirement assets, others voluntarily pay a higher contribution. This relieves employees financially and increases the retirement assets they can save over the course of their working lives.

Some employers also offer their employees the option of choosing from several savings plan options with the pension fund. In this way, insured persons can decide for themselves whether to pay in the minimum or voluntarily more for their 2nd pillar.

In addition to the mandatory part, some pension funds also offer savings options in the supplementary part, which also makes a significant difference to future retirement benefits. A maximum of around 86,000 Swiss francs of the annual salary is insured in the mandatory part - the remainder falls into the extra-mandatory part if the pension fund offers this.

Deal with retirement planning at an early stage

Particularly for part-time employees, it is also relevant how high the coordination deduction of the pension fund is. The law stipulates that around CHF 25,000 of the salary is insured via the 1st pillar. Therefore, this amount is deducted from the gross annual salary as a coordination deduction in the 2nd pillar, which disproportionately reduces the insured salary with the pension fund, especially for lower salaries and part-time positions, and leads to pension gaps. However, employers or the relevant pension fund commission can voluntarily set a lower coordination deduction or take part-time work into account accordingly, which noticeably increases the insured salary and enables significantly more retirement assets to be saved.

As a conclusion of the study, the authors appeal to young professionals to always inquire about employers' PF benefits when looking for a job. "Depending on how much you work, how much you earn and your overall personal situation, there are various aspects to consider. In any case, it's worth looking into retirement planning even at a young age," summarizes Daniela Bräm.

Source: AXA