#1. Legislative History
Para. 1 Occupational pension provision was first enshrined in the Federal Constitution in 1972 with Art. 34quater aFC (BBl 1971 II 1609). The constitutional article at that time already established the basic features of today's three-pillar system and gave the Confederation the mandate to enact provisions on occupational pension provision.
Para. 2 During the total revision of the Federal Constitution in 1999, Art. 34quater aFC was transferred to Art. 113 FC with only minor linguistic adjustments (BBl 1997 I 379). The Federal Council message notes that the existing constitutional requirements were to be adopted unchanged in order to ensure the continuity of the proven three-pillar system (BBl 1997 I 379 f.).
Para. 3 The most important substantive innovation compared to Art. 34quater aFC is found in para. 2 lit. e, according to which the Confederation may declare occupational pension provision obligatory for certain groups of self-employed persons. This competence was inserted based on experiences with voluntary insurance and sometimes inadequate pension benefits for self-employed persons (BBl 1997 I 380).
#2. Systematic Classification
Para. 4 Art. 113 FC forms, together with Art. 111 FC (OASI/DI) and Art. 114 FC (unemployment insurance), the core of the constitutional social insurance system. The three pillars of old-age provision are systematically coordinated: the first pillar (OASI) secures basic needs, the second pillar (occupational pension provision) enables the continuation of the customary standard of living, and the third pillar (self-provision) serves individual supplementation.
Para. 5 The competence provision in para. 1 belongs systematically to the substantive competences of the Confederation (Art. 54–125 FC). It establishes a comprehensive federal competence with subsequent derogatory effect, whereby cantonal regulations in the area of occupational pension provision are only subsidiarily permissible (→ Art. 49 FC). However, the cantons remain responsible for the occupational pension provision of their own personnel, insofar as federal law does not provide conclusive regulations (BGE 135 I 28 E. 5).
Para. 6 The social objectives in Art. 41 FC supplement the concrete constitutional mandates of Art. 111–114 FC programmatically. While Art. 41 para. 2 FC does not establish subjective rights, the specific requirements in Art. 113 para. 2 FC create binding guidelines for the federal legislator (→ Art. 41 FC).
#3. Elements of the Provision / Content of the Norm
Para. 7 Legislative competence (para. 1): The Confederation has not only the authority but the duty to enact provisions on occupational pension provision. This comprehensive competence covers all aspects of the second pillar, from benefit requirements through organization to supervision.
Para. 8 Benefit objective (para. 2 lit. a): Occupational pension provision shall, together with OASI/DI, enable the «continuation of the customary standard of living in an appropriate manner». According to the Federal Council's conception, pension benefits from the first and second pillars should together reach 60% of the last gross salary for middle incomes. The Federal Supreme Court has clarified that overinsurance through the accumulation of various social insurances is not compatible with the objective of the second pillar (BGE 130 V 369 E. 2.2).
Para. 9 Insurance obligation (para. 2 lit. b): The obligation for employees forms the core of occupational pension provision. The concept of employee status in occupational pension provision is identical to that of OASI. The law may provide exceptions, for example for minor incomes or short employment periods (Riemer/Riemer-Kafka, Recht der beruflichen Vorsorge, § 4 Para. 25 ff.).
Para. 10 Implementation through pension institutions (para. 2 lit. c): Employers must insure their employees with a pension institution. This decentralized organization is an essential characteristic of Swiss occupational pension provision (Helbling, Personalvorsorge und BVG, p. 89). The Confederation must subsidiarily provide a federal pension institution (safety fund).
Para. 11 Self-employed persons (para. 2 lit. d and e): Self-employed persons may insure themselves voluntarily. The Confederation may introduce an obligation for certain groups, which it has not yet done (Stauffer, Berufliche Vorsorge, Para. 156).
Para. 12 Financing (para. 3): Joint financing is constitutionally enshrined. Employers must pay at least half of their employees' contributions. This minimum parity applies to both obligatory and supplementary occupational pension provision.
Para. 13 Minimum requirements (para. 4): All pension institutions must meet federal law minimum requirements. These concern organization, financing, investment regulations and supervision (Schneider/Geiser/Gächter, BVG Handkommentar, Intro Para. 45 ff.).
#4. Legal Consequences
Para. 14 The Confederation's legislative competence under para. 1 is comprehensive and conclusive. Cantonal provisions are only permissible insofar as federal law leaves room, particularly in the design of public-law pension funds (BGE 135 I 28 E. 5.2).
Para. 15 The principles established in para. 2 are binding on the federal legislator. It has considerable discretion in implementation, but may not circumvent the constitutional requirements (Häfelin/Haller/Keller/Thurnherr, Bundesstaatsrecht, Para. 2194).
Para. 16 The benefit objective under para. 2 lit. a does not establish an individual constitutional claim to a specific pension amount. It is an objective specification for the legislator, which is concretized in the BVG through the determination of the insured earnings and conversion rates (Müller/Schefer, Grundrechte, p. 894).
Para. 17 The financing provision in para. 3 has immediate effect. Regulatory provisions that provide for a lower employer contribution are void (Brühwiler, Betriebliche Personalvorsorge, p. 234).
#5. Disputes
Para. 18 Scope of the obligation: It is disputed to what extent the legislator is authorized to provide exceptions from the insurance obligation. While Riemer/Riemer-Kafka (Recht der beruflichen Vorsorge, § 4 Para. 30) advocate a restrictive interpretation, others plead for greater legislative discretion. Federal Supreme Court jurisprudence tends toward the more extensive interpretation.
Para. 19 Obligation for self-employed persons: The question of which groups of self-employed persons should have an obligation introduced is controversially discussed. Stauffer (Berufliche Vorsorge, Para. 158) supports an obligation for pseudo-self-employed persons, while Helbling (Personalvorsorge und BVG, p. 112) warns against overregulation.
Para. 20 Relationship to the first pillar: The coordination principle between the first and second pillars is disputed. Schneider (in: Schneider/Geiser/Gächter, BVG Handkommentar, Intro Para. 23) advocates close coordination, while Brühwiler (Obligatorische berufliche Vorsorge, p. 45) pleads for more flexibility. The Federal Supreme Court has not taken a conclusive position.
#6. Practical Notes
Para. 21 When establishing or restructuring pension institutions, the constitutional minimum requirements under para. 4 must be observed from the beginning. Compliance with joint financing under para. 3 must be secured through regulations.
Para. 22 For the design of pension plans, the benefit objective under para. 2 lit. a should be used as a guideline. When determining benefits in the extra-obligatory area, attention should be paid to balanced coordination with the first pillar to avoid overinsurance (BGE 130 V 369).
Para. 23 Self-employed persons should actively examine the possibility of voluntary insurance under para. 2 lit. d. The tax advantages and pension protection usually outweigh the higher contribution costs compared to private provision (pillar 3a).
Para. 24 In cross-border situations, it should be noted that Art. 113 FC is primarily oriented toward Swiss pension institutions. The crediting of foreign pension benefits follows the rules of international social insurance law (BGE 150 II 202 E. 4).