Law on the Provident Institute of the Canton of Ticino (LIPCT) (LIPCT)

The Ticino Cantonal Pension Institute (hereinafter referred to as the Pension Institute) is hereby constituted, with the purpose of ensuring adequate occupational provision for its members in the event of early retirement, old age, disability, and for their survivors in the event of death.

1 The provident institution is an autonomous public law entity with its own legal personality. Its registered office is in Bellinzona.

2 The provident institution is registered in the register of occupational provident schemes.

3 The provident institution is registered in the Commercial Register.

The provident institution provides the benefits set forth in this law and the provisions of the regulations. In any case, the minimum benefits of the Federal Act on Occupational Retirement, Survivors' and Disability Insurance of 25 June 1982 (LPP) are guaranteed.

1 The members of the Council of State, magistrates of the judiciary, and State employees, as defined by the Law on the Organization of State Employees and Teachers of 15 March 1995 (LORD), who receive a minimum annual salary established by the present law, are mandatorily affiliated with the Pension Institute. [2]

2 The following may be affiliated with the Pension Institute by agreement, with the prior consent of the Council of State

a) private schools that provide instruction within the limits of compulsory schooling according to the School Law of 1 February 1990;

b) Municipalities and other public law entities;

c) private law entities and public utility entities, recurrently subsidized by the Canton, by virtue of an explicit legal provision.

3 In the event of termination of the affiliation agreement, the regulation on the partial liquidation of the Pension Institute in force shall apply. [3]

4 The modalities relating to the affiliation of external employers and their obligations are regulated by the Pension Institute, which may provide for an additional consolidation contribution payable by them if the ratio between their active insured members and their pension beneficiaries is less favourable than the overall ratio of the Institute. [4]

[2] Para. amended by Law of 20.10.2020; in force since 1.1.2021 – BU 2021, 259.

[3] Para. amended by Law of 17.10.2023; in force since 1.1.2025 – BU 2024, 184.

[4] Para. amended by Law of 17.10.2023; in force since 1.1.2025 – BU 2024, 184.

1 The insurance commences with the employment relationship.

2 The insurance obligation ceases when the right to an old-age, survivors', or disability benefit arises, or when the employment relationship is dissolved.

3 Until the month of their 20th birthday, employees are insured solely against invalidity and death.

4 The Pension Institution regulates the specific provisions concerning the commencement and termination of insurance coverage.

[5] Benefits are determined in the provident fund regulations issued by the supreme body.

[5] Art. amended by L 17.10.2023; in force from 1.1.2025 - BU 2024, 184.

... [6]

[6] Art. repealed by Law 17.10.2023; effective from 1.1.2025 - BU 2024, 184.

[7] 1 The pension institution provides, for beneficiaries of an old-age pension accrued before reaching the AVS reference age, a temporary substitute supplement for the AVS pension.

2 The substitute supplement is financed by the insured person and employers. Employers' contributions amount at most to the amount necessary to finance a temporary AVS substitute supplement equal to 80% of the maximum AVS pension.

3 The distribution of financing between employers and insured persons, as well as all other operational aspects, are governed by the institution's pension regulations.

[7] Art. amended by L 17.10.2023; in force from 1.1.2025 - BU 2024, 184.

Income of the provident institution consists of

a) ordinary contributions from insured persons;

b) ordinary and extraordinary contributions from employers;

c) specific financing for the substitute supplement to the OASI/DI annuity;

d) restructuring contributions from employers and insured persons;

e) contributions from employers and insured persons for financing the adjustment of pensions to inflation;

f) income from assets;

g) payments from third parties by way of donation or legacy.

1 The insured salary corresponds to the annual salary reduced by an amount, called the coordination deduction, equal to 7/8 of the maximum AVS/AI pension. In the event of part-time activity, the salary and the coordination deduction are reduced proportionally.

2 The minimum insured salary is equal to 1/8 of the maximum AVS/AI pension.

3 The maximum insured salary is determined based on the Law on Salaries of State Employees and Teachers of January 23, 2017 (LStip), the Law on Magistrates' Fees of May 14, 1973, and the Law on Remuneration and Professional Provident Fund for Members of the Council of State of October 20, 2020 (LRetCdS). [8]

4 The provident institution defines the modalities for determining the insured salary.

[8] Para. amended by L 20.10.2020; in force since 1.1.2021 – BU 2021, 259, previous amendment: BU 2017, 90.

1 The pension institution levies contributions from insured persons and employers necessary to finance the pensions and benefits provided for by this law, administrative expenses, and the LPP guarantee fund.

2 The total ordinary contribution amounts to 22.1% of the insured salary, of which 11.6% is borne by employers and 10.5% by insured persons.

3 For insured persons under 20 years of age, who do not yet pay contributions for the old-age pension, a contribution equal to 2.2% of the insured salary is levied, of which 1.3% is borne by employers and 0.9% by insured persons. [9]

4 The extraordinary contribution amounts to 4% of the insured salary and is borne by employers. [10]

5 The restructuring contribution amounts to 3% of the insured salary, is borne by employers, and is levied until December 31, 2051. [11]

6 In addition to the ordinary contribution referred to in paragraph 2, a supplementary contribution may be levied, amounting to a maximum of 4% of the insured salary, and is entirely intended to increase the old-age credits set out in the pension regulations. The Council of State, upon proposal from the supreme body of the Institution, has the authority to set the actual amount of the supplementary contribution within the stipulated range. The Council of State, after consulting with recognized trade unions, also decides on the distribution of its financing between employers and insured persons, taking into account that the minimum participation borne by insured persons amounts to 50% of the supplementary contribution, and the maximum to 70%. [12]

7 … [13]

[9] Paragraph amended by Law of 17.10.2023; in force from 1.1.2025 - BU 2024, 184.

[10] Paragraph amended by Law of 17.10.2023; in force from 1.1.2025 - BU 2024, 184.

[11] Paragraph amended by Law of 17.10.2023; in force from 1.1.2025 - BU 2024, 184.

[12] Paragraph amended by Law of 17.10.2023; in force from 1.1.2025 - BU 2024, 184.

[13] Paragraph repealed by Law of 17.10.2023; in force from 1.1.2025 - BU 2024, 184.

1 The adjustment of pensions for inflation is suspended until the national consumer price index has reached a cumulative increase of 15% from the index value of November 2012.

2 Pensions are adjusted to the evolution of the national consumer price index on January 1st of each year, based on the effective index for the month of November, within the limits permitted by paragraph 3.

3 For the financing of the adjustment of pensions for inflation, a maximum contribution of 1.5% is levied, of which 40% is borne by the insured and 60% by the employer.

4 The supreme body of the Pension Institute determines the methods for calculating the annual contribution levy and the percentage of the pension adjustment.

[14] Pursuant to Art. 1d of the Ordinance on Occupational Retirement, Survivors' and Disability Pension Plans of 18 April 1984 (OPP 2), the pension institution may offer up to three pension plans based on defined contributions for old-age benefits.

[14] Art. amended by L 17.10.2023; in force from 1.1.2025 - FO 2024, 184.

1 The assets of the provident institution shall be invested in accordance with the provisions of Art. 71 OPA and Art. 49 et seq. OPPC 2 in such a way as to ensure their security, profitability, adequate diversification of risks, and necessary liquidity.

2 The supreme body of the provident institution shall issue the regulations concerning asset management.

1 The provident institution applies the partial capitalization system under the conditions set out in Article 72a OPA and subsequent articles, and in transitional provision c. of the amendment to the OPA of December 17, 2010.

2 The provident institution aims to achieve a funding ratio of 85% by December 31, 2051.

1 To achieve the target coverage ratio of 85% by December 31, 2051, the Canton shall pay the amount of CHF 454,500,000.00. Payment shall be made in annual constant instalments, ensuring a return of 3.5% on the residual debt through the payment of the market interest rate and an additional supplementary contribution.

2 The payment terms for the total amount to be borne by the Canton shall be defined by a separate agreement to be signed by the supreme body of the Pension Institute and the Council of State.

3 The Canton shall record a debt recognition towards the Pension Institute for the amount of CHF 454,500,000.00 as a liability in its balance sheet as of January 1, 2013. A corresponding amount shall be recorded as an asset in the Canton's balance sheet, with a depreciation period ending by December 31, 2051.

4 The Canton may also proceed with the recapitalization of the Pension Institute through the transfer of real estate assets, based on an agreement to be stipulated between the supreme body and the Council of State. In this case, the annual instalments referred to in paragraph 1 shall be recalculated.

1 The Canton guarantees the coverage of the following benefits by the pension institution, to the extent that they are not fully financed on the basis of initial coverage ratios pursuant to Art. 72a para. 1 lit. b LPP

a) old-age, invalidity, and survivors' benefits, and vested benefits;

b) exit benefits due to the outgoing insured members in the event of a partial liquidation;

c) technical deficits caused by a partial liquidation to the remaining insured members.

**2 The state guarantee also applies to commitments towards the insured members of employers who subsequently join the pension institution.**

**3 The supreme body of the pension institution shall issue a regulation on partial liquidation, approved by the Supervisory Authority for occupational pension schemes.**

1 The supreme body of the provident institution is composed of 10 members, 5 of whom represent the insured persons and 5 represent the employers.

2 The State Councillor responsible for finance and personnel is an ex officio member of the supreme body of the provident institution. The State Council designates the representatives of the employers.

3 The supreme body governs the organization and functioning of the provident institution.

1 The supreme body of the pension institution assumes its general management, ensures the fulfillment of its legal duties, and establishes its strategic objectives and principles, as well as the means necessary for their realization. It defines the organization of the pension institution, ensures its financial stability, and supervises its management.

2 The competencies of the supreme body are those stipulated in Article 51a, paragraph 2 of the LPP.

1. Disputes concerning occupational old-age, survivors' and invalidity insurance between the provident institution, the employer, and the beneficiaries shall be decided by the Cantonal Insurance Court as a sole instance.

2. The Cantonal Insurance Court must be seised by means of a petition.

3. Decisions under administrative law of the provident institution may be appealed to the Cantonal Administrative Court within 30 days of notification.

4. The Administrative Procedure Act of 24 September 2013 and the Procedure Act for cases before the Cantonal Insurance Court of 23 June 2008 are applicable. [15]

[15] Para. introduced by the Act of 24.9.2013; in force since 1.3.2014 – BU 2013, 472.

The responsibilities of the governing bodies of the pension institution are defined by Art. 52 LPP.

[16] The Law on the State Employees' Pension Fund of 14 September 1976 is repealed.

[16] Art. amended by L 17.10.2023; in force from 1.1.2025 - BU 2024, 184.

1. With its establishment, the State Employees’ Provident Institution continues the activity of the State Employees’ Pension Fund.

2. The State Employees’ Provident Institution assumes the assets and liabilities of the State Employees’ Pension Fund.

1 Acquired rights under previous provisions are maintained.

2 Events covered by the Pension Institution occurring after the entry into force of the law shall be governed by the new provisions.

3 As of 1 January 2013, the contribution-based insurance plan shall apply to all active insured persons, subject to the guarantee provided for in paragraphs 4, 5, 6, 7, 8, 9, and 10 of this transitional provision.

4 For insured persons who are 50 years of age or older as of 31 December 2012, in the event of early retirement or old-age retirement at 58, 59, 60, 61, 62, 63, 64, and 65 years of age, after the entry into force of this amendment to the law, the annual pension amount established as of 31 December 2012 is guaranteed, it being understood that fractions of at least 6 months related to the age at the time of retirement count as one year.

5 The annual pension amount guaranteed as of 31 December 2012 according to paragraph 3 is calculated based on the provisions of the Law on the State Employees' Pension Fund of 14 September 1976 and the Regulations of the State Employees' Pension Fund of 29 May 1996 in force at that time, it being understood that the conversion rates concerning the financing of the AVS/AI supplementary benefit as of 1 January 2013 are as follows

a) employer financing

Retirement age

Multiplication factor for each franc of AVS/AI supplementary benefit

Men

Women

58

5.96

5.256

59

5.216

4.471

60

4.441

3.655

61

3.632

2.802

62

2.788

1.911

63

1.904

0.978

64

0.976

0

b) insured persons' financing

Retirement age

Multiplication factor for each franc of AVS/AI supplementary benefit

Men

Women

58

0.35734

0.33402

59

0.31841

0.28999

60

0.27624

0.24199

61

0.23041

0.18957

62

0.18047

0.13219

63

0.12587

0.06923

64

0.06596

6 Any withdrawals, repayments in application of the LPP rules on the promotion of home ownership, or transfers and redemptions within the scope of divorce proceedings shall modify the amount established as of 31 December 2012 according to paragraph 3.

7 The guaranteed annual amount referred to in paragraphs 4 and 5 may be partially capitalized up to a maximum of 50%.

The conversion rates for the capitalization of the guaranteed pension amount are as follows

Age

Men

Women

Old-age

Widow's

Old-age

Widow's

60

13.796

3.418

15.008

0.142

61

13.448

3.474

14.692

0.132

62

13.099

3.526

14.375

0.122

63

12.748

3.572

14.053

0.111

64

12.394

3.613

13.731

0.101

65

12.037

3.648

13.403

0.091

66

11.677

3.679

13.072

0.080

67

11.313

3.704

12.734

0.071

68

10.948

3.720

12.388

0.062

69

10.581

3.732

12.037

0.054

70

10.211

3.736

11.677

0.047

8 At the request of the beneficiary, old-age, disability, early, or survivor's pension for the spouse and registered partner or for orphans, if less than 10%, 6%, and 2% respectively of the minimum old-age AVS pension, may be paid out as a lump sum based on the conversion rates referred to in paragraph 7.

In this case, the AVS/AI supplementary benefit is also paid out as a lump sum based on the following conversion rates

Age

Men

Women

(AVS 64 years)

(AVS 63 years)

60

4.441

3.655

2.805

61

3.632

2.802

1.912

62

2.788

1.911

0.979

63

1.904

0.978

0.000

64

0.976

0.000

65

0.000

9 In addition to the pension amount guaranteed as of 31 December 2012 according to paragraph 3, the AVS/AI supplementary benefit calculated based on the norms in force as of 31 December 2012 shall be assigned, it being understood that the established amount shall be adjusted to the evolution of the maximum AVS/AI pension.

10 For insured persons as of 31 December 2012 who have completed 40 full years of insurance and have reached 60 years of age, no contributions shall be levied.

The old-age savings shall continue to be credited with annual old-age credits and interest, in accordance with the Institution's pension regulations.

11 Individual insured persons affiliated as of 31 December 2012 with the Pension Institution, within the meaning of Article 11 of the Law on the State Employees' Pension Fund of 14 September 1976, shall maintain their insurance regardless of the activity performed, provided that this does not entail greater risks for the Pension Institution.

12 As of 31 December 2012, the actuarial reserve of beneficiaries of benefits is recalculated according to the actuarial tables VZ 2010, taking into account a technical interest rate of 3.5%. This provision is valid only until 31 December 2012.

13 The Pension Fund Commission, the Committee, and the Groups provided for under previous law shall remain in office until the new supreme body takes up its functions. In application of the statutes of the Pension Institution, the State Council shall organize the election of the supreme body.

14 The Pension Institution undertakes to ensure the continuation of employment relationships for the current employees of the State Employees' Pension Fund.

15 For insured persons as of 31 December 2012 affiliated with the Fund as of 31 December 1994, the insured salary corresponds to the annual salary reduced by an amount, called the coordination deduction, equal to 2/3 of the maximum AVS/AI pension. In case of part-time employment, the salary and the coordination deduction are proportionally reduced.

After the expiry of the time limits for the exercise of the right of referendum, the present law shall be published in the Official Bulletin of Laws and Executive Acts and shall enter into force on 1 January 2013.

Annex [17]

Published in OB 2012, 623.

[17] Annex repealed by L 17.10.2023; in force from 1.1.2025 - OB 2024, 184.