LPP 2025 in Geneva: Understanding, Anticipating, and Managing New Obligations for Companies and Self-Employed

The occupational pension reform (LPP) taking full effect in 2025 marks a milestone for employers, SMEs, and the self-employed in French-speaking Switzerland, particularly in Geneva. Between new thresholds, revised scales, administrative compliance processes, and financial impacts, this article provides a comprehensive analysis of the practical implications for managers, financial directors, and HR professionals.

1. Introduction: The Stakes of the 2025 Reform and Why You Should Care

With the entry into force of the LPP adjustments on January 1, 2025, all companies affiliated with a pension fund—including self-employed individuals who have opted for voluntary insurance—are affected. Failure to comply can result in back payment of contributions, penalties, and deterioration of the social climate or employer brand.

This article aims to equip managers, directors, and payroll/accounting administrators to:

• Understand the new rules
• Quickly adapt management tools
• Make the right decisions for the company and employees

2. Recap: LPP Structures and Principles in Switzerland

The LPP (Occupational Pensions Act) forms the second pillar of the Swiss retirement system, alongside the AVS. Its goal: ensure adequate income in retirement (or in case of disability or death) through capitalization, with shared contributions (employees/employers).

Obligations and Beneficiaries

• Mandatory affiliation: Employees above a certain annual income threshold (see §3 below).
• Self-employed: Affiliation possible on a voluntary basis, offering flexibility and tax optimization.

3. New Amounts and Thresholds Applicable from 2025

As of January 1, 2025:

• The mandatory LPP entry threshold is raised to CHF 22,680/year (previously CHF 22,050)
• The coordination deduction rises to CHF 26,460 (instead of CHF 25,725)
• The minimum LPP interest rate remains at 1.25%

The table below summarizes the main values:

| Parameter | 2024 | 2025 | |----------------------------------|-----------|-----------| | Mandatory entry threshold | 22,050 CHF| 22,680 CHF| | Coordination deduction | 25,725 CHF| 26,460 CHF| | Minimum interest rate | 1.25% | 1.25% |

Official source and detailed amounts: Federal Social Insurance Office – LPP Amounts 2025

Practical Consequences for HR and Payroll Management

• Impact on calculating the coordinated salary
• Increased risk of overlooking certain employees (multi-employer, part-time)
• Need to update payroll or ERP software (Odoo, Swissdec, etc.)

4. Financial Impact and Cash Flow Adaptation

The increase in coordinated salary entails an automatic rise in social charges for both the company and employees.

• Adjust cash flow plans and budget forecasts
• Possibly negotiate with the pension fund regarding supplementary coverages
• Anticipate possible refusals from some employees (in the case of voluntary coverage for low salaries)

5. Compliance Obligations and Best Administrative Practices

• Ensure all employees from the new threshold are covered
• Check for the automatic update of the coordination deduction in payroll tools
• Keep internal communications up-to-date, especially for employees whose LPP status changes
• Review group insurance policies with pension fund contacts

Audit and Internal Control

• Annual LPP declaration verification (ideally with an external audit every 2–3 years)
• Thorough documentation to avoid social, labor, or tax disputes

6. Special Points for the Self-Employed

• Opting for voluntary LPP can bring significant tax benefits but requires a rational projection of 2025 income, a proper assessment of allowed expenses, and a careful choice of pension institution.
• Get informed about LPP portability, especially in case of a change of status (from self-employed to employee or vice versa)

7. Special Cases and FAQ (Multi-Employer, Part-Time, Cross-Border Employees)

• Multi-employer employee: how to aggregate salaries for the LPP threshold?
• Specifics for cross-border workers employed in Geneva
• Management of part-time employees/"totalization" theory
• Impacts of changing collective insurer in 2025

8. Practical Tips for SMEs and Employers in Geneva

1. Take an HR inventory to identify newly LPP-subject employees
2. Request a status review from your fiduciary or accountant
3. Update payroll/ERP processes (Swissdec/Odoo compliance, etc.)
4. Assist affected employees in understanding their situation
5. Review pension strategies (supplementary LPP, attractive packages)

9. Useful Tools and Resources

• Contribution simulators (offered by some pension funds, or via Ark Fiduciaire on request)
• 2025 payroll compliance checklist (downloadable template)
• Outsourced audit of your LPP documentation

10. Conclusion: Anticipating = Securing Your Business and Enhancing Employer Value

The LPP 2025 reform should be approached as an opportunity to modernize HR governance and strengthen attractiveness. Ark Fiduciaire supports you with tailored services for compliance, optimization, and proactive management of all LPP, payroll, and pension plan issues in Geneva.

For an LPP audit, a question about 2025 compliance, or tailored support, contact our experts.