Column by Alain Grand
Full insurance or a collective foundation? This question arises for SMEs especially when many employees work part-time, are paid by the hour, or when assignments and workloads regularly change. In such companies, it is not only about security, but also about how well a pension solution can be implemented in day-to-day operations. What is crucial is how well a pension solution can handle fluctuating salaries, irregular working hours, and frequent entries and exits.
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In the picture: Alain Grand, Specialist manager in Pension solutions at Tellco
Where rigid models reach their limits in practice
For companies with stable full-time positions, occupational pension provision is usually easy to plan. The situation is different when a large part of the workforce does not earn the same salary every month. Particularly with part-time employees, hourly-paid staff, or temporary assignments, administrative effort quickly arises: salaries change, employment levels fluctuate, and entries and exits are more frequent.
In such constellations, the pension fund quickly becomes a practical management issue. The more complex the personnel structure, the more important it becomes to have a solution that not only works correctly, but also remains manageable in everyday operations.
Full insurance offers stability, collective foundations more flexibility
Full insurance remains attractive where companies primarily rely on guarantees and extensive risk transfer. For traditional workforces with consistent salaries, this can be a good fit. However, this security comes at a price: guarantees and the full assumption of risk by the insurer mean that full insurance solutions—depending on the personnel structure—are associated with higher costs or risk premiums than more flexible collective foundations.
With part-time and temporary staff, however, other requirements often take centre stage. This is where the collective foundation shows its strength: it can enable more flexible pension solutions that are better suited to a dynamic personnel structure. This concerns not only the design of the insured salary, but above all the operational implementation in everyday practice.
Accurate contribution accounting is particularly important for hourly pay
A major advantage of flexible collective foundations lies with companies that calculate contributions on an hourly wage basis. Here, the insured salary is not the same every month, but is based on the hours actually worked. This is the reality for many sectors: retail, healthcare, care services, cleaning, or project-based services.
In such cases, a pension solution is needed that can reflect these salary patterns as accurately as possible. When contributions can be calculated closer to the income actually earned, several advantages arise:
Firstly, pension provision becomes more transparent administratively for employers. Secondly, the contribution burden can be aligned more closely with the actual payroll. Thirdly, the system also becomes more understandable for employees, because the pension provision corresponds to their real employment situation.
For SMEs, this is relevant. With fluctuating assignments, rigid processes often prove impractical. Flexible models create greater alignment between the salary system, personnel reality, and the pension solution.
Part-time work also requires more than a standard solution
A similar situation applies to part-time employees. Companies employing many small or variable workloads do not need an abstract standard solution, but rather pension provision that fits their workforce. A collective foundation can offer advantages here, particularly when the company does not have a homogeneous personnel profile, but instead varying workloads, variable monthly salaries, and frequent changes.
For employers, this is more than just administration. A pension solution that is transparent, fair, and closer to actual working conditions can also help with recruitment, employee retention, and internal acceptance.
For SMEs, it is not only security that counts, but practical usability
The question, therefore, is not only whether full insurance provides security. It does. The more important question for many SMEs is whether this form of security fits their own workforce.
Where part-time work, hourly wages, temporary assignments, and fluctuating incomes shape everyday operations, there are strong arguments for taking a closer look at a collective foundation with a flexible pension solution.
Because the best solution is not simply a standard solution. It is the one that combines security with operational reality.