For managers active in the international arena, a change of employer typically leads to a change of domicile and/or place of work and thus encompasses a change of the social security and pension affiliation. Today the social security and pension systems are, to a great extent, coordinated between Switzerland and the EU, the European Free Trade Association and major third states (such as the US, Canada and Australia). In practice however, developing and implementing suitable and appropriate pension solutions for managers and C-level employees in the international context is frequently challenging with regard to the applicable pension legislation, the domestic and international taxation considerations and on a technical level. These challenges should be proactively addressed on a case-by-case basis when negotiating an international hire's overall compensation package.
This is because, in the context of international hires, managers and C-level employees increasingly recognise pension solutions offered by their prospective employer as part of their overall compensation. In doing so, international candidates not only pay attention to the contributions deducted from their gross salary but also to future pension benefits and the option to include (foreign) pension accruals in their prospective pension.
The mandatory pension legislation applicable to a manager (and any other employee) in the international context typically follows the manager's social security affiliation. Social security affiliation results, on an individual basis, from numerous factors such as the manager's citizenship and residence, local legal qualification and weighting of further professional activities and governing body activities. To ensure coverage by a Swiss pension provider, a manager should be affiliated with the Swiss social security legislation. The manager may achieve this by relocating to Switzerland, commencing further professional activities in Switzerland or abroad or by ceasing to conduct the professional activities outside of Switzerland.
Regarding communication with Swiss and foreign authorities and pension providers, it is advisable to apply for a certification of the manager's social security affiliation in Switzerland (for example, a certificate of coverage or a form A1) with the competent Swiss social security authorities and to keep this accessible in the manager's human resources file. To ensure the smooth performance of...