In case of disability, what will happen to my second pillar?

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The occupations insurance exists to support the first pillar in order to meet your needs once you retire but not only. Your pension fund also exists to back you in case life plays tricks on you. If, by misfortune, you are no longer able to work, it will bridge your revenue shortfall.  

Should a tragedy occur, you will have to inform the central office of the OASI who will be in charge of confirming the earning incapacity and in particular, its extent. It takes on average two years for the DI to deliver a decision. 

There is however a difference if the disability is the result of an illness or of an accident. In both cases, pensions are paid 50 to 90% of your last salary.  

The second pillar in the event of disability due to an illness 

In Switzerland, 80% of work interruptions are due to an illness. The remaining 20% concern work interruptions following an accident, a congenital problem, etc… 

The fact that falling ill occurs a lot more frequently than other disability cases makes this coverage very costly to insure. Two important stages take place after an earning incapacity case: 

1) From the first day of disability until the decision of the DI (3rd day – 720th day): during this period, your income will no longer come from your employment but rather from the obligation every employer has towards its employees. This obligation, stipulated in the Code of Obligations indicates precisely the time limits for maintaining salaries. The time limit depends exclusively on your seniority in the company and your employer’s generosity. 

2) From the recognised disability until the first day of your retirement: 

This second stage falls within the competence of your occupational insurance (the disability LPP). Once it receives confirmation of a case of disability, it starts paying pensions, in addition to the first pillar (DI). 

To find out the amount of the pensions paid, you must check the retirement benefit plan chosen by your employer.

In most cases, the amount of the pension is expressed in % of the insured salary. These pensions, which include the first pillar, range from 50% to 60% of the last salary.

Graph showing the different pensions and capital that will be paid from the 1st pillar (AHV) and the 2nd pillar (LPP) when you stop working due to illness

The second pillar in the event of disability due to an accident

In this case, the same two stages as in the case of illness also exist but the actors and amounts are entirely different. Due to the fact that disabilities following an accident are rare, the coverages offered go beyond those for illnesses. 

1) From the first day of disability until the decision of the DI (3rd day – 720th day): During this time, the Federal Act on Accident Insurance offers good protection to employees. It allows for a coverage of 80% of the last salary in every case. 

2) From the recognised disability until the first day of your retirement:

Here, pensions will no longer be paid by the LPP but rather by the second component of the occupational insurance, the AIA. This insurance does not take into account the conditions of the pension fund, on average, the income maintenance varies around 90% of the last income.

Graph showing the different pensions and capital that will be paid from the 1st pillar (AHV) and the 2nd pillar (LPP) when you stop working as a result of an accident

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