It’s important to us to explain the complex topic of the occupational benefit scheme as comprehensibly as possible. However, sometimes we cannot get around using technical terms. In our glossary we explain these technical terms briefly and in a reader-friendly manner.
Rate of conversion
Rate fixed by the Federal Council based on life expectancy. The rate of conversion is used to calculate old-age pensions on the basis of the vested retirement assets accumulated up to retirement age (vested retirement assets multiplied by the rate of conversion = annual old-age pension). It is also used to calculate disability pensions as stipulated in the BVG/LPP.
Repayment of vested retirement assets
In accordance with Art. 15, para.2 of the BVG/LPP, the Federal Council fixes the minimum rate of interest on which vested retirement assets are repaid. The rate is currently (2005) 2.5% (Art. 12 of the BVV/OPP2).
Representative, legal
An individual who is capable (or bound) to carry out whatever acts are necessary on behalf of another person who is considered to be incapable (a minor, in the care of a guardian, unauthorized) so that the latter's obligations and rights may be validated.
Retirement credits
Retirement credits are the part of the pension costs which are saved. Savings contributions are made both by the employee and the employer. Retirement credits as prescribed by the BVG/LPP are calculated annually as a percentage of the insured salary.
Rightful claimant
A person to whom, on the basis of their own or derived rights, an insurance entitlement is due at the time when the insured event occurs (the policyholder, co-insured persons under liability insurance and group personal insurance, the beneficiary).
Risk premium (BV)
Portion of premium for occupational pension provision that is collected for the risks of death and disability.