Average pay is the name for a pension scheme for employees. The premium and the amount of the retirement income in the average pay scheme depend on the amount of salary, the period that an employee is employed by you and the annual accrual percentage.
Pension in an average pay scheme
The word average pay almost speaks for itself. The employee receives a pension based on the average salary he or she earns over the years. The average pay pension has benefits for both the employees and the employer.
How does an average pay scheme work?
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Accruing a pension
Your employees can be sure of guaranteed pension benefits, these are fixed. Your employees know what their retirement income will be on the retirement date.
The amount of the contribution you pay as an employer is based on the pension of your employees. The contribution is therefore not fixed.
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Paying out a pension
Your employees receive monthly pension benefits from the retirement date until their death.
Why would employers opt for average pay?
Employers who opt for an average pay scheme opt for manageable pension costs. Because the average earnings are the basis of the average pay scheme, the employer will not be faced with great fluctuations in pension expenditure when the employee receives a wage increase. An increase in salary only has an impact on the pension in future years of service.
Advantages of the average pay scheme for employees
The main advantage for employees is that the average pay pension is a guaranteed pension. Zwitserleven is a pension insurer. Unlike a pension fund, a pension insurer is not allowed to adjust a guaranteed benefit or contribution in the event of disappointing investment results or low actuarial interest rates. This means that we simply have to, and will, live up to the guarantees we give.
The average pay pension product
Are you curious how you, as an employer, can make arrangements for an average pay scheme for your employees? Zwitserleven offers you the i-Pensioen Average Pay. This average pay scheme is entirely online, which means that the costs are low. You can link your payroll administration to Zwitserleven, report changes online and view your current financial data. Your employees will have direct access to their pension via MijnZwitserleven, their personal online environment.
Customised pension with average pay scheme
The average pay scheme is one of the options in a customised solution for larger employers. Average pay can also be expanded with a solution for transfers of accrued benefits and with BudgetControle. Zwitserleven will be happy to discuss the details of your pension scheme with you.
Need a quote or advice?
As a good employer, you want to choose a pension that is right for your business and for your employees. We have a wide range of options to suit every type of business. Such as an investment-based defined contribution pension scheme, possibly in conjunction with Nettopensioen. A complete overview of our products is available.
If you would like to know more about this or any of our other pension schemes, or would like to get specific advice on a pension scheme for your employees, contact an independent financial adviser. Zwitserleven has an excellent relationship with a large number of professional insurance advisers.