Understanding the LPP: what private employers need to know

When a family hires a nanny, they become a private employer and must comply with certain legal obligations regarding social security benefits. Among these, occupational pension plans (LPP) are a key element that should not be overlooked. In this article, we will provide you with a simple and clear understanding of what the LPP is, when it becomes mandatory, and what it means for you and your nanny.

What is the LPP?

The LPP (Occupational Pension Plan Act) is part of the three-pillar pension system in Switzerland. It aims to complement the first pillar: the AHV (Old-Age and Survivors’ Insurance), with the LPP being the second pillar. This allows workers to build up additional retirement savings to maintain a decent standard of living after retirement age. In addition, it covers certain risks such as disability and death. The third pillar is an individual choice and is not legally binding.

When is the LPP mandatory for a nanny?

As a private employer, you must register your nanny with an occupational pension fund if:

  • She earns a gross annual salary of at least CHF 22,680 (entry threshold in 2025).
  • She is at least 17 years old for risk coverage (disability and death) and at least 25 years old for retirement savings.
  • The contract is for a period of more than 3 months.

Therefore, when these conditions are met, affiliation to the LPP is mandatory, and you must contribute accordingly.

What are the implications for the employer and the employee?

Affiliation to the LPP entails financial obligations for both the employer and the employee.

 Contributions:

  • Contributions are calculated based on the coordinated salary (i.e., the gross salary reduced by a coordination amount set at CHF 26,460 in 2025 and a coordinated minimum salary of CHF 3,780).
  • The employer and the employee contribute equally, but the employer can decide to cover a larger share.

Benefits for the employee:

  • She benefits from supplementary retirement savings and
  • She is protected in the event of disability or death.

Benefits for the employer:

  • First, compliance with legal obligations, thus avoiding penalties.
  • But also, greater attractiveness for recruiting and retaining a trusted nanny depending on the contribution plan chosen.

 How do I register my nanny with the LPP?

Registration is through an occupational pension fund. You can:

  1. Contact a recognized pension fund.
  2. Appoint Priorité enfants, who will take care of everything for you.

Do you still have questions? Don’t hesitate to contact us.