Beneficiary Clauses
Optimal beneficiary designation in your pension fund and pillar 3a for your loved ones
What are beneficiary clauses, and why are they so important?
Beneficiary clauses determine who receives your retirement savings from the pension fund (2nd pillar) and pillar 3a in the event of your death. Unlike inheritance law, here you can, within certain limits, decide for yourself who benefits – often at a lower tax cost than through a will.
Many people don't realize that the standard beneficiary order of the pension fund and pillar 3a applies automatically if no individual adjustments are made. This can mean the money doesn't end up where you want it to.
Actively shaping your beneficiary clauses is especially crucial for cohabiting couples, patchwork families, or childless couples – it can direct hundreds of thousands of francs to the right hands and save massive amounts of tax.
Why beneficiary clauses matter so much
Secure your partner optimally
Ensure your life partner – even without a marriage certificate – is protected and receives the retirement funds in the event of your death.
Save on taxes
Beneficiaries of retirement funds often pay significantly less tax than heirs. The right structure can save thousands of francs.
Account for patchwork families
Consider stepchildren, ex-partners, or other important people who would receive nothing under statutory inheritance law.
Create legal certainty
Clearly worded beneficiary clauses prevent disputes and ensure clear-cut arrangements.
Make use of flexibility
The beneficiary order in retirement provision is more flexible than inheritance law – make the most of this leeway.
Close gaps
Many pension regulations have default beneficiaries that don't match your wishes. We close these gaps.
In-depth knowledge
Beneficiary designation in the pension fund (2nd pillar)
The pension fund pays out various benefits in the event of death: widow's/widower's pension, orphan's pensions, and often a lump-sum death benefit. The beneficiary order is governed by the BVG (Federal Act on Occupational Retirement Benefits), but pension fund regulations offer some leeway.
Statutory order for the lump-sum death benefit: 1. Surviving spouse or registered partner 2. Direct descendants and persons who were supported by the deceased 3. Parents, siblings, other statutory heirs
Important: Cohabiting partners are only entitled if they are included in the fund regulations AND you have actively registered them. Check your pension fund regulations and register your partner in writing.
Beneficiary designation in pillar 3a
Pillar 3a has its own beneficiary order, independent of inheritance law. The statutory order under BVV 3 is:
1. Surviving spouse or registered partner 2. Direct descendants, persons substantially supported by the deceased, or the person who lived with the deceased in an uninterrupted domestic partnership for the last 5 years 3. Parents 4. Siblings 5. Other heirs
Within each level, you can determine the beneficiary shares yourself. Example: you can specify that your cohabiting partner receives 70% and your children 30%. Without a written arrangement, the statutory allocation applies.
Tax advantages of beneficiary designation
Retirement savings paid out via a beneficiary clause are subject to separate, privileged taxation – not inheritance tax. The difference can be substantial:
Spouses: In most cantons, tax-free or taxed very lightly Children: Reduced lump-sum benefit tax, usually 5-15% of the balance Cohabiting partners: Depending on the canton, 10-25% lump-sum benefit tax (vs. 20-40% inheritance tax!) Siblings/others: Here too, the lump-sum benefit tax is often more favorable than inheritance tax
Example: With a pillar 3a balance of CHF 200'000, the difference between beneficiary designation (lump-sum benefit tax) and inheritance for a cohabiting partner can amount to CHF 30'000 or more.
Beneficiary designation for life insurance
Life insurance policies (risk insurance and endowment insurance) also have their own beneficiary clauses that operate independently of inheritance law. Here you have great freedom:
You can generally name any person as beneficiary – even people outside the family. The insurance sum then goes directly to that person, without becoming part of the estate.
Important points: - Irrevocable beneficiary clause: the beneficiary has a fixed claim - Revocable beneficiary clause: you can change the beneficiary at any time - The insurance sum may fall outside the statutory entitlement (depending on premium payments)
Check your existing life insurance policies: outdated beneficiary designations (e.g. an ex-spouse) are often still on file.
How to update your beneficiary clauses
Updating beneficiary clauses is easier than many people think. Here are the steps for each type of retirement provision:
Pension fund: 1. Request the current fund regulations 2. Check whether your desired beneficiary is even eligible 3. Fill out the relevant form (usually a "beneficiary declaration") 4. Send it signed to the pension fund
Pillar 3a (bank or insurer): 1. Request the current pension certificate with the beneficiary order 2. Draw up a written beneficiary clause 3. File it with the bank/insurer
Life insurance: 1. Request the policy and check the current beneficiary designation 2. Write to the insurer to change the beneficiary designation 3. Confirm the change in writing
Tip: Make a list of all your retirement and insurance contracts and review each beneficiary designation.
Avoid common mistakes
These are the mistakes we see most often in practice
Cohabiting partner not registered
Without active registration with the pension fund, the life partner may receive nothing despite years of relationship.
Outdated beneficiary designations
After a divorce or separation, ex-partners are often still designated as beneficiaries. The money then goes to the wrong person.
No beneficiary designation on file for pillar 3a
Without a written beneficiary clause, the statutory order applies – which may not match your wishes.
Statutory entitlement underestimated
Beneficiary designations in retirement provision can, under certain circumstances, violate the statutory entitlement. Caution is warranted for very high amounts.
Tax implications not considered
There are big differences depending on the canton and degree of relationship. An unfavorable beneficiary designation can trigger unnecessary tax.
Life insurance forgotten
Life insurance policies have their own beneficiary clauses that must be checked and updated separately.
Checklist: your next steps
What you can do right now
Frequently asked questions about Beneficiary Clauses
Answers to the most important questions
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