{"id":3727,"date":"2023-04-06T17:18:37","date_gmt":"2023-04-06T15:18:37","guid":{"rendered":"https:\/\/hitachi.musterpage.ch\/dev\/infocenter\/fachwoerterverzeichnis\/"},"modified":"2025-07-09T09:49:40","modified_gmt":"2025-07-09T07:49:40","slug":"fachwoerterverzeichnis","status":"publish","type":"page","link":"https:\/\/www.hitachigroupvorsorge.ch\/en\/service\/infocenter\/fachwoerterverzeichnis\/","title":{"rendered":"Glossary"},"content":{"rendered":"\n\n
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Glossary<\/p>\n<\/span>\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t

Pension funds from A to Z<\/h1>\n\t\t\t\t\t\n\n\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t \n\t\t\t\t\t<\/div>\n\n\t\t\t\t\n \t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\n \n\t \n\t \n \n \n\t<\/div>\n<\/section>\n\n\n\n\n
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AHV<\/h4>
\n <\/i>\n <\/div>\n <\/div>\n <\/a>\n
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The Swiss Old-age and Survivors\u2019 Insurance (Alters- und Hinterlassenenversicherung, AHV) is the mandatory pension insurance in Switzerland. Together with the Disability Insurance (Invalidenversicherung, IV) and the supplementary benefits, it forms the first pillar of the Swiss three-pillar system and serves to cover subsistence needs. The AHV is financed on a pay-as-you-go basis \u2013 the contributions collected are used directly to finance the pension benefits.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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AHV bridging pension<\/h4>
\n <\/i>\n <\/div>\n <\/div>\n <\/a>\n
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In the event of retirement between the age of 63 and the statutory retirement age, members who are liable to pay contributions are entitled up to 2028 to a monthly bridging pension, provided that they have paid contributions for at least five years. The bridging pension is equal to the maximum AHV retirement pension applicable at the time of retirement. The bridging pension is financed by the employer.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Actuarial interest rate<\/h4>
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The actuarial interest rate is a mathematical value used to calculate the required coverage capital for future pension benefits over their entire term. The interest rate depends on the expected development of the financial markets.<\/p>\n

The lower the actuarial interest rate, the higher the required pension capital of a pension fund. The actuarial interest rate must be set at a level that can be financed by the return on assets.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Actuarial reserves<\/h4>
\n <\/i>\n <\/div>\n <\/div>\n <\/a>\n
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Reserves that must be established to cover the risks of uncertainty inherent in the forecasts (longevity, retirement losses, risk fluctuations, adjustment of the conversion rate, adjustment of pensions to inflation, etc.). The actuarial reserves are calculated by the occupational benefits expert.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Administrative expenses <\/h4>
\n <\/i>\n <\/div>\n <\/div>\n <\/a>\n
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The administrative expenses include the costs for the general management and administration, activities of the Board of Trustees, audits, work of the occupational benefits expert and fees charged by the supervisory authorities.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Affiliation agreement<\/h4>
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The affiliation agreement is concluded between the employer and a pension fund and insures the employees under the pension fund. The agreement covers the rights and obligations of the contracting parties.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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BVG<\/h4>
\n <\/i>\n <\/div>\n <\/div>\n <\/a>\n
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Federal Law on Occupational Retirement, Survivors\u2018 and Disability Pension Plans; 1985 framework law setting out minimum standards, supplemented in 1995 by the Vested Benefits Act and the Promotion of Home Ownership Act. The BVG governs pension benefits as the 2nd<\/sup> pillar of the Swiss pension system.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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BVG minimum interest rate<\/h4>
\n <\/i>\n <\/div>\n <\/div>\n <\/a>\n
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Each year, the Federal Council sets the minimum interest rate that pension funds must pay on retirement assets under the mandatory pension fund (BVG assets).<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Board of Trustees<\/h4>
\n <\/i>\n <\/div>\n <\/div>\n <\/a>\n
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Supreme governing body of pension funds that are organised as a foundation. Due to the equal representation requirement, half of the members are employer representatives and half are employee representatives.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Buy-in\/voluntary contribution<\/h4>
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A buy-in is a voluntary contribution members pay to the Pension Fund or the Supplementary Insurance Plan. The buy-in amount is credited to the pension assets. The buy-in conditions \u2013 in particular the maximum amount \u2013 is specified in the rules<\/a>. Before the first buy-in, a form must be completed and submitted to Avadis.<\/p>\n

In the event of death, the total personal buy-ins less any early withdrawals for home ownership or divorce payments will be disbursed to the eligible beneficiaries.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Capital cover method<\/h4>
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The pension fund is based on the capital cover method, i.e. the capital required to pay benefits is saved for each member during their employment. The actual amount of the retirement benefits is therefore not known until the end of the savings process.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Capital payment<\/h4>
\n <\/i>\n <\/div>\n <\/div>\n <\/a>\n
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Amount that can be withdrawn from the Pension Fund in the form of a lump-sum payment, in Swiss francs. In the Pension Fund, up to 100% of the pension assets can be withdrawn upon retirement. In the Supplementary Insurance Plan, 100% of the capital is paid out in all cases. Withdrawals of pension capital are subject to non-recurrent taxes. The amount of the tax depends on the amount paid out and the place of residence.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Contributions tables<\/h4>
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Members can choose between three contributions tables: Standard, Standard plus and Standard minus.<\/p>\n

Under the Standard plus contributions table, members voluntarily pay in higher monthly contributions to the Pension Fund to increase their savings capital. This will also increase their retirement pension.<\/p>\n

The Standard minus contributions table can be chosen for those periods in life when members can only afford or would prefer to pay lower contributions. However, lower contributions also mean a reduction in retirement benefits. The risk contributions for the events of death and disability are the same for each contributions table. Regardless of the table members choose, the employer always pays contributions pursuant to the Standard table. A change in the contributions table is possible at the beginning of each month. Where members do not state a preference, they will automatically pay contributions pursuant to the Standard table.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Conversion rate<\/h4>
\n <\/i>\n <\/div>\n <\/div>\n <\/a>\n
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The annual retirement pension is calculated by multiplying the conversion rate with the retirement assets.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Coordination deduction<\/h4>
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Amount deducted from the annual salary to calculate the insured salary. The deduction is used to coordinate between the 1st<\/sup> and 2nd<\/sup> pillars and ensures that the portion of the salary already insured under the AHV is not additionally insured under the BVG.<\/p>\n

The coordination deduction is equal to one third of the annual salary earned at an employment level of 100%, but does not exceed 7\/8 of the maximum AHV retirement pension. Where members work part-time, the maximum coordination deduction is weighted according to the level of employment to ensure that employees with a part-time employment have fewer deficits in the Pension Fund.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Coverage capital<\/h4>
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The capital required by the pension fund to fund the commitments made to the members under the rules<\/a>.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Coverage ratio<\/h4>
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The coverage ratio reflects the percentage of a pension fund\u2019s financial commitments that are covered by assets on a given date and serves as an indicator of the pension fund\u2019s financial situation. A ratio of 100% corresponds to full coverage of the commitments.<\/p>\n

Put simply, a coverage ratio of at least 100% means that the available capital would be sufficient to pay out all of the pension fund\u2019s current and future commitments today.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Death benefits<\/h4>
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In the event of the death of an active member, the Rules may provide for death benefits. The conditions and amount of the death benefits are set out in the rules<\/a>.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Disability pension<\/h4>
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Members who are at least 40% disabled as defined by the Swiss Federal Disability Insurance (IV) are entitled to a disability pension provided they were insured with the Pension Fund \/ Supplementary Insurance Plan at the onset of the incapacity for work whose cause led to their disability.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Disabled person\u2019s child benefit<\/h4>
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Recipients of a disability pension are entitled to disabled person\u2019s child benefits. The annual disabled person\u2019s child benefit for each eligible child amounts to 20% of the disbursed disability pension. Payment of disabled person\u2019s child benefits starts at the same time as the disability pension. Entitlement ceases in the event of the child\u2019s death or when eligibility ceases.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Early partial retirement<\/h4>
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Members have the option of retiring part-time from the age of 58. The conditions and the effect on the retirement benefits are set out in the rules<\/a>.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Early retirement<\/h4>
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Members have the option of retiring from the age of 58. The conditions and the effect on the retirement benefits are set out in the rules<\/a>.<\/p>\n

Members whose employment is terminated by the company after the age of 55 may request continued insurance with the Pension Fund.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Encouragement of home ownership (WEF)<\/h4>
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Under the BVG, pension assets may be withdrawn before retirement if the capital is used to finance home ownership. The conditions and amount of the potential early withdrawal are specified in the rules<\/a>\u00a0and the insurance certificate.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Entitlement to benefits<\/h4>
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An entitlement to benefits arises in the insured events of retirement, disability or death.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Equal representation<\/h4>
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Employees and the employer have equal representation on a pension funds\u2019s supreme governing body (Board of Trustees).<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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FZG<\/h4>
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Short for \u201cBundesgesetz \u00fcber die Freiz\u00fcgigkeit in der beruflichen Alters-, Hinterlassenen- und Invalidenvorsorge\u201d (Federal Law on Vesting in Occupational Retirement, Survivors\u2019 and Disability Pension Plans).<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Financial restructuring<\/h4>
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If a pension fund is underfunded, the respective board of trustees is required by law to adopt suitable restructuring measures. These measures should be capable of eliminating the insufficient capital cover within a reasonable period of time, usually within five to seven years.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Flexible retirement<\/h4>
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In the event of retirement after the 63rd<\/sup> birthday, the retirement pension is calculated on the basis of the savings capital accrued at the time of retirement and the conversion rate. From the time of retirement until the statutory retirement age (65), members liable to pay contributions are entitled up to 2028 to a monthly bridging pension, provided that they have paid contributions for at least five years. The bridging pension is equal to the maximum AHV retirement pension applicable at the time of retirement. For part-time employees, the bridging pension is reduced on the basis of the average level of part-time work during the last five years. The bridging pension is financed by the employer.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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IV<\/h4>
\n <\/i>\n <\/div>\n <\/div>\n <\/a>\n
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Disability insurance (Invalidenversicherung, IV) is the mandatory disability insurance in Switzerland. Together with old-age and survivors\u2019 insurance (AHV) and supplementary benefits, disability insurance forms the first pillar of the Swiss three-pillar system.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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IVG<\/h4>
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Federal Disability Insurance Act (Bundesgesetz \u00fcber die Invalidenversicherung (IV))<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Insufficient capital cover<\/h4>
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A pension fund’s capital cover is insufficient if the coverage ratio is below 100%.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Insured salary<\/h4>
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Relevant salary for the calculation of contributions and benefits in the Pension Fund \/ Supplementary Insurance Plan. The insured salary is calculated by subtracting the coordination deduction from the annual salary.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Investment foundation<\/h4>
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Investment foundations offer institutional investors products that are reserved exclusively for Swiss 2nd<\/sup> and 3rd<\/sup> pillar pension funds. They are notable for the fact that investors have the right to participate in the governing bodies of the foundation.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Investments<\/h4>
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Pension funds invest their members\u2018 money for maximum return to pay maximum pensions. Laws and regulations govern the basic principles of asset management.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Occupational Pension Supervisory Commission <\/h4>
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The Occupational Pension Supervisory Commission (OAK BV) consists of seven to nine members appointed by the Federal Council. Among other tasks, the Commission is responsible for ensuring consistency in the supervisory activities of the supervisory authorities.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Orphan\u2019s pension<\/h4>
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Children or orphans left behind after the death of an employee or pension recipient are entitled to an orphan\u2019s pension. The conditions and amount of the orphan\u2019s pension are set out in the rules<\/a>.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Partial liquidation<\/h4>
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If large numbers of employees leave the Pension Fund at the same time, a partial liquidation must be carried out. The Pension Fund\u2019s assets will be divided up and the departing members can take their share with them. Depending on the Pension Fund\u2019s financial position, the departing members benefit from a surplus or have to share in a shortfall on a pro rata basis. The BVG retirement assets may not be reduced. The requirements for a partial liquidation are set out in the Rules on partial liquidation.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Partner\u2019s pension<\/h4>
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If unmarried members have lived verifiably in the same household with an unmarried, unrelated domestic partner for an uninterrupted period of at least five years prior to the member\u2019s death, or if they were responsible for the maintenance of one or more joint children, the deceased member\u2019s partner is entitled to the same benefits as a spouse.<\/p>\n

Partners of unmarried recipients of retirement pensions are not entitled to a partner\u2019s pension unless the partnership was entered into prior to the member\u2018s 60th birthday.<\/p>\n

If the partner does not fulfil the conditions for a partner\u2019s pension but the partnership lasted for at least five years, a lump-sum payment will be made. There is no entitlement to a partner\u2019s pension if the beneficiary already draws a spouse\u2019s or partner\u2019s pension from a different pension fund.<\/p>\n

The application for the payment of a partner\u2019s pension must be made within three months of the member\u2019s death, otherwise the entitlement lapses.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Pension assets<\/h4>
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The pension assets consist of the sum accrued during the period of employment and are primarily used to finance 2nd<\/sup> pillar pensions. They comprise the effective savings contributions made by the employee and the employer, contributed vested benefits, voluntary buy-ins and interest.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Pension assets from non-mandatory pension plans<\/h4>
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Members\u2019 retirement account balances that exceed the statutory minimum requirements. The Supplementary Insurance Plan exclusively handles pension assets from non-mandatory pension plans.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Pension credits<\/h4>
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Pension credits consist of the amount credited to the members\u2019 pension assets. They include the savings contributions made by the employer and the employee.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Pensioners<\/h4>
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Recipients of a pension (AHV, IV, pension benfits, private pension contracts, etc.). Age related pensioners, recipients of disability benefits, surviving spouses, orphans and any other beneficiaries are all referred to as pensioners.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Reinsurance<\/h4>
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Process whereby a pension fund covers either all or some of the risks through a group insurance contract with an insurance company. In contrast to the Supplementary Insurance Plan, the Pension Fund has no reinsurance policy.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Retirement pension<\/h4>
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Annual retirement pension paid until the end of the member\u2019s life. The retirement pension is paid in Swiss francs and is taxable as income.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Risk contribution<\/h4>
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The full risk contribution which serves to finance the risks of disability and death at the Hitachi Group Pension Fund is paid in full by the employer for all members.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Shadow account<\/h4>
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Under the BVG, all registered pension funds are required to maintain individual retirement accounts pursuant to the BVG minimum insurance standards in addition to the accounts in which the actual payments and benefits are recorded. This so-called \u201cauxiliary or shadow account\u201d serves to prove that the minimum requirements of the BVG are met.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Substitute occupational benefits institutions<\/h4>
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Substitute occupational benefits institution is ap pension fund which provides mandatory insurance for employers who do not comply with their obligation to affiliate with a pension fund. \u00a0It is also possible to voluntarily affiliate with the substitute occupational benefits institution. In addition, this institution is the rightful recipient of any vested benefits for which members fail to provide any transfer information.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Supplementary Insurance Plan<\/h4>
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The Supplementary Insurance Plan provides retirement benefits and risk insurance for higher salary components that are not covered by the Hitachi Group Pension Fund.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Value fluctuation reserve<\/h4>
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Value fluctuation reserves serve to compensate any losses when the value of assets drops. The amount of the required value fluctuation reserves depends on the risk level of the selected investment strategy and the risk capacity of the pension fund.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Vested benefits<\/h4>
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Where members leave the company, they are entitled to vested benefits. These benefits are at least equal to the savings capital accrued at the time of departure. The vested benefits are transferred to the pension fund of the new employer or \u2013 if there is no new employer yet \u2013 paid into a vested benefits account or a vested benefits policy. A cash withdrawal is only possible in certain cases, for example when departing members take up self-employment.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Widow\u2019s\/widower\u2019s pension<\/h4>
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In the event of the death of an active member or pension recipient, surviving spouses or partners are entitled to a widow\u2019s\/widower\u2019s or partner\u2019s pension. The conditions and amount of the widow\u2019s\/widower\u2019s pension are set out in the rules<\/a>. The term spouse\u2019s pension is used interchangeably.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t\n

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Withholding tax<\/h4>
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Termination benefits payable to members who are not resident in Switzerland are subject to withholding tax. The PF deducts the due amount directly from the termination benefit and transfers it to the respective withholding tax office. If recipients of benefits are domiciled abroad, the withholding tax will be deducted in accordance with the relevant provisions of the tax authorities of the Canton of Aargau.<\/p>\n <\/div>\n <\/div>\n <\/div>\n\t\t <\/div>\n\t\t <\/div>\n <\/section>\n\n\n\n \n\t

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