3a solution from Finpension

Hi Finpension,

If I open vested benefits and pillar 2 with 100k each for a total of 200k - is the entire 200k covered under deposit insurance or is it only 100k?

Regards,
Legin

Is there much point at keeping cash in 2/3a?

Web interface will be available in a couple of months.

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Hi leginj,

In the case of a bankruptcy of a bank, the coverage would be only up to 100k per client if you have two vested benefits accounts with the same bank. However, this is applicable only for the cash portion. Securities won’t be affected in case of a bankruptcy.

Kind regards

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Pillar 3a assets and vested benefits are not protected by Esisuisse, regardless of which solution you use. Assets are in every case held in the name of a retirement foundation (pillar 3a) or vested benefits foundation (pillar 2). You simply hold a claim against them (much like a bank account). All Swiss retirement foundations are governed by the same laws and regulations. So there is no disadvantage in this regard.

More important considerations include: the financial health of the foundation; whether the foundation actually owns the shares and other assets, or simply holds claims to assets held in street name; the canton in which the foundation is domiciled (if withholding taxes are a consideration).

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The currency conversion fees had an adverse affect on my investment performance and I think I will move my 3rd pillar to finpension, but I’ll wait a couple of months to see if VIAC has a reply.

It’s true that they are not protected in the sense of Esisuisse. So, they do not have this 100K protection that will be paid by the 6 billion fund. However, they are still considered as preferential deposits for the first 100K, like cash in bank account. So, in case of bankruptcy, these claims will be repaid earlier than other claims. But it’s true that it is a weaker protection.

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This is basically the same for all 3a solutions in Switzerland then?

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It is:

See section “Are Pillar 3a (restricted pension scheme) deposits preferential?” here:

https://www.esisuisse.ch/en/deposit%20insurance/faq

That’s my take on it yes since all 3a solutions are under the same regulations. But this is only for the cash of the third pillar. So, for us wanting to invest 99% in stocks, it won’t make that much difference whether it’s protected or not.

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@finpension

Hi Beat,
Thank you for your answers so far and the attractive 3a-product you’ve launched.
I have a question regarding the shares of the funds once you’ve reached the official retirement age: Is it possible to keep some of the shares and not liquidate them? I guess it’s not possible since those are institutional share classes being used but a confirmation would be nice.
Thank you and kind regards

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I got less invested because of the fees and VIAC did not make it transparent. Makes me unhappy they did this

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@skyw4lker

No, unfortunately it’s not possible to stay in the institutional classes after retirement. However, retail classes are available of some of the funds with a bit a higher fee load.
Kind regards

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@ProvidentRetriever the institutional shares will be sold at retirement and cash will be paid out. The retail shares then have to be bought in your private account to keep the exposure at the same level. We are aware that there is a demand for a solution where you can keep the exposure at all times. However it’s not that easy to implement a good solution (after retirement you would become a wealth management client and we would need to do a new onboarding with KYC etc). We definitely look at this and I’m convinced that there will be solutions available for this at some point in time. Kind regards

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So what is “at retirement”? For men 65 or 70 years of age?
Another question: tax wise which solution is better Viac or Finpension when cashing out?

If you’re tax resident in Switzerland, it doesn’t matter. If not withholding tax might differ but also depend on your tax residence (if it’s covered by the dta you can often get the withholding back).

This looks very interesting. I have an old Pillar 3a account to transfer and I’d like to diversify from Viac.

One thing I am not sure about is the fees. 0.39% flat fee plus VAT means what exactly, 0.42%? And if I invest in a fund with 0% TER, then that’s the fee, while if I invest in a fund with say 0.05% TER, the total fee will be 0.47%?

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Yes, that’s exactly it. For instance, Equity 100 strategy has 0.02% TER, so your total TER will be 0.44%.

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In terms of withholding tax, Finpension is more favorable as its retirement foundation is domiciled in Schywz (Viac’s is domiciled in Zurich). At least under today’s tax regime. Of course, you can always transfer to a different retirement foundation before withdrawing, but that involves some effort and possibly costs.

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…and the VAT is calculated on the basis of the 0.44% fee? Which VAT-rate applies?