Occupational Pensions Act (OPA) Reform 2024: What SMEs need to know now!

On March 17, 2023, the National Council and the Council of States approved the reform of occupational benefits insurance. The referendum on the OPA reform will take place on September 22, 2024. The aim of this reform is to strengthen the financing of the 2nd pillar, maintain the level of benefits and improve the protection of part-time employees, especially women.

A central element of the approved reform is the reduction of the OPA conversion rate from 6.8% to 6.0%. This is intended to reduce the undesirable redistribution from employees to pensioners and introduce pension supplements for the transitional generation. At the same time, the savings process will be strengthened by adjusting the retirement credits and the coordination deduction. These measures will help to largely maintain the level of benefits and improve the pension situation of workers with low wages - often younger or part-time employed women and men.

Entry threshold

The entry threshold for the pension fund will be lowered from CHF 22,050 to CHF 19,845. Employees who work part-time or have a low income will benefit from this measure. This means for companies: If more employees are insured, pension costs will rise.

Coordination deduction

The OPA reform will reduce the coordination deduction to 20% of the AHV salary in future. This should ensure that 80% of the respective salary is always insured (up to the OPA salary cap of CHF 88,200). This would improve the situation of part-time employees in particular, as a fixed coordination deduction would no longer be deducted in the mandatory area. As a result, the insured income in the occupational benefit scheme would increase.

Smoothing of OPA retirement credits

The OPA reform provides for a smoothing of retirement credits, which should make the employment and continued employment of over 55-year-olds more attractive for employers.

Compensation measures / pension supplements and financing

The reduction in the OPA minimum conversion rate is largely compensated for over the entire contribution period by reducing the coordination deduction and adjusting the retirement credits. However, this does not apply to employees who retire in the coming years, which is why they are threatened with pension losses. To cushion these losses, compensation measures in the form of pension supplements are planned for this "transitional generation" of 15 cohorts.

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