Occupational benefits (LPP) are central to Swiss social protection, and each change strongly impacts the finances of SMEs, self-employed, and employees in Geneva. In 2025, several notable updates will come into effect, adopted by the Federal Council this summer.
1. Updated thresholds and amounts From January 1, 2025, the entry threshold increases from CHF 22,050 to CHF 22,680 (annual salary), and the coordination deduction from CHF 25,725 to CHF 26,460. This increases the "coordinated" salary on which contributions are deducted, thus modifying the monthly amount withheld from payroll—directly impacting small businesses' cash flow and employees' disposable income.
2. LPP 2025 rates (unchanged)
- 25 to 34 years: 7% (3.5% employer + 3.5% employee)
- 35 to 44 years: 10% (5% each)
- 45 to 54 years: 15% (7.5% each)
- 55 to 65 years: 18% (9% each) Note: these are statutory minimums. Many Geneva funds apply higher rates to provide better pensions.
3. Unchanged minimum interest rate The minimum interest rate on LPP assets will remain at 1.25% in 2025.
4. Adjustment of pensions The increase in AVS/AI pensions automatically leads to a rise in 2nd pillar survivors' and disability pensions (example: 5.8% increase for pensions that started in 2021).
5. Practical impacts for companies and employees
- All payroll software must be updated to use the new thresholds starting from January.
- Self-employed affiliated to an LPP must recalculate their allowable tax deductions.
- Cross-border employers must check the specific application of rules depending on the bilateral agreement and tax domicile.
6. Suggested optimizations
- Use a chartered accountant familiar with the new LPP regulations in Geneva to reduce pension fund discrepancies and maximize social coverage.
- Update your pension projections using the new rates.
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For further insights and to anticipate the impacts of pension reforms in French-speaking Switzerland and Geneva, contact ARK Fiduciaire for tailored support and digital solutions for your payroll, salary administration, and social compliance.
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