Reviewing your pension fund - is it worth it?
Pension funds in Switzerland manage assets of around CHF 1,160 billion. However, the risk and administration costs vary greatly - with the same benefits. A review of the existing pension fund solution can also be worthwhile.
When does a review make sense?
Pension fund contracts usually have a term of three to five years and are then automatically renewed. Termination is usually possible with six months' notice to the end of the year. Anyone considering a change should start by clarifying a few important points:
- Are all insured persons fully able to work when switching?
- How will interest be paid on the retirement assets - especially in the extra-mandatory area?
- If there is no full insurance: What is the coverage ratio?
- How are the insured salary and benefits defined?
- What administrative costs are incurred?
It pays to take a look at the benefits
In 2024, many pension funds earned better interest on their insured persons' retirement assets than the statutory minimum interest rate of 1.25 percent. Anyone who has saved up considerable assets should ask themselves whether their own pension fund also offers attractive interest rates or whether it might make sense to switch.
SME case study: Are adjustments worthwhile?
A practical example shows that an optimization of the pension fund solution can also bring advantages for married couples in their own SME. For example, if the wife of an owner only earns a part-time salary of CHF 24,000, her effective insured salary after coordination deductions remains very low. This can lead to the administrative costs exceeding the actual savings portion. In such cases, it may be worth considering an alternative pension fund model.
Conclusion
The pension fund is a central building block of the financial future. If the benefits are reviewed regularly, not only can costs be saved, but it may also be possible to benefit from better conditions.
