The Swiss occupational pension scheme (deuxième pilier, LPP — Loi sur la prévoyance professionnelle) is the mandatory second pillar of Switzerland's three-pillar retirement system, requiring employers and employees to jointly contribute to an approved pension fund. Contributions are co-funded (employer minimum 50%), capitalised in pension funds, and converted to retirement benefits at retirement age. In financial due diligence, pension fund obligations — particularly over-mandatory defined benefit plans — represent material potential liabilities: under-coverage (funding ratio below 100%) generates employer contribution obligations that must be integrated as debt-like items in the net debt bridge.

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Example: due diligence on a Zurich SA identifies a pension fund coverage ratio of 92% (CHF 2.5 million deficit on CHF 31.3 million obligations). This deficit, absent from CO balance sheet accounts but visible in actuarial statements, is treated as a debt-like item — reducing the equity value paid to selling shareholders by CHF 2.5 million in the acquisition price bridge.

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Hectelion integrates pension fund deficits in net debt calculations and coordinates with independent actuaries to validate actuarial assumptions in Swiss acquisition due diligence.