LOB contributions in times of Covid-19
The Federal Council has decided that employers may temporarily use the employer contribution reserves they have accumulated for the payment of employee contributions to the occupational benefit scheme.
In order to alleviate the financing bottlenecks of many companies that have arisen due to the Corona crisis, the Federal Council has taken various measures. In addition to the possibility for companies to obtain so-called bridging loans with a federal guarantee from their respective house bank, the facilitation of short-time work and the possibility to request a deferral of payments for social security contributions, there is a new temporary instrument to prevent BVG contributions from not being paid due to liquidity bottlenecks. The Federal Council has decided that employers may temporarily use any accumulated employer contribution reserves for the payment of employee contributions to the occupational benefit scheme. This is intended to prevent employers from not paying their BVG contributions due to payment difficulties.
"Use of the contribution reserve creates liquidity."
Effect on employees
This has no effect on the employees, as the BVG contributions are still deducted from their salary as usual. The total contributions, i.e. both the contributions financed directly by the employees through corresponding salary deductions and the contributions financed from the accumulated employer contribution reserves, are credited directly to the employees at the responsible pension fund.
Procedure
The employer shall notify the competent pension scheme of the use of the contribution reserves in this context. An amendment of the pension fund regulations is not necessary.
This regulation is valid for six months for the time being.
This article was written by lawyer Anita Hug.
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