3rd Pillar Switzerland

Banks, Insurances & Third Pillar
1

Hello everyone,
I discovered this forum recently and it’s incredible how useful it was for my research.
I’m writing you because I’m a newcomer on Financing, I’m a graphic designer based in Switzerland (Geneve), so I need your help :slight_smile:

I would like to invest a bit of money, let’s say 3000 CHF annually in the third pillar, with the aim to increase my pension fund. I already have a pension fund in “Publica” (Swiss Federal Pension Fund).
I read that investing with VIAC or Finpension could be a good solution, but I don’t have any idea how to do it in the right way.

Do you have any suggestions about this?
Thank you in advance for your help.

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2

Are you asking about what investment strategy to choose at VIAC/finpension? Or is something else unclear?

For a 100% equity strategy, this thread may be useful:

Depending on your age, risk tolerance and investments outside pillar 3a, you may want to invest in less than 100% equity. The same applies if your pillar 3a investment horizon is shorter than usual (e.g. if you’re planning to withdraw your pillar 3a to buy a house).

3

Hello Jay,
Thank you much for your fast reply. I’m 40 years old. I’m ready to bet with a risk medium/high. As I said, I already have a fund pension. I received some offers from “Generali” and “Swiss Life” with an average annual borrowing interest rate of 1,95 %, all this seems excessive and irrational. I would like to “leave to mature” the found invested for the next 15/20 years. Thank you for the link, I run to read it.

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4

Never mix insurance and investments. Those mixed products seem to be a bad deal (high fees, low transparency, expensive to get out). Stick to finpension or VIAC (or frankly or TrueWealth) for pillar 3a investments.

If you have a need for a disability or life insurance beyond what pillars 1 and 2 already provide, get a separate, risk-only insurance for that. And if you can afford to max out 3a with investments and separately pay the insurance premium, choose a non-3a insurance.

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5

I second that. Also see this blog post

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6

For a start, 3a is a segregated tax-advantaged segment of your wealth that you can use for different types of investments. You can have a 3a saving account, funds invested in different assets and so on. Just don’t buy insurance mixed with savings.

If you mean that you want to invest your 3a money into stocks, sure, it is a great idea. Because these money are locked and you can’t touch them for next 20 years, it is a good idea to use them for something that you shouldn’t touch for next 20 years, i.e. stock funds.

So select a 3a provider that allows you to invest in stock funds. Here in this forum people tend to support Bogle’s approach - broadly diversified investments in low cost passive index funds. That’s what you find at finpension (my preference) and VIAC. Read respective forum threads and go on.

7

There is a blog post about 3rd pillar comparison here

You could also read this step by step 3rd pillar creation guide including screenshots:

8

Thank you so much for your comment, It’s what I would like to do. I already have a pension fund. (Publica) paid by the employer. Now I want to put some money in stock fund like Finpension or VIAC.
As recommended by all, I will not accept the proposal made by the various social insurance.

9

Thanks, I go to read it.

10

That’s what I need, I will carefully read :slight_smile: Thank you everyone for your help.
Unfortunately for you, I’ll be back to ask you questions about this.

11

As you used the word pension fund for multiple purposes.
Make sure you understand the the difference between the second pillar (your companies pension fund) and the third pillar (3a/b accounts).

12

I’m sorry, maybe I said it wrong, I already have a pension fund (Publica). In addition, I would like to increase the money in my wallet after 65 years. Now I have to find the best way to do it.

13

I’m’ sorry, maybe I’m asking stupid questions.
What I would like to do is to put money monthly on VIAC or Finpension or TrueWealth etc… and never touch them until the age of 65, I’m currently not able to manage the investment by myself. If I understood well, VIAC will create “automatically” a package based on your investment risk, and after that? just wait 25 years? I’m 40 years old :slight_smile:

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14
  • Open an account with finpension/VIAC
  • Set the strategy to Global 100
  • Pay in whatever you want up to the yearly max each year
  • Forget about it until 65

If you feel like optimizing on taxes, repeat the above steps 5x, and then rotate payments between accounts each year.

You could consider moving from 100 to lower equity % closer to retirement.
But if this is going to be your only (equity) investment outside of your 2nd pillar, there is no risk of being “overweight” in stocks.

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15

Ciao dbu, what do you mean “overweight” in stock? Can I earn something at the end?

16

Rather than default recommend 100% equity, for people without too much financial knowledge, I’d say they should simply go through the risk assessment flow, iirc both viac and finpension are pretty decent.

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17

Fair enough.

But seems they only hold 2nd pillar (“bond-like”) and no other equity investment.
Even the max 7k/year vs. 50-100k they probably have in the 2nd pillar - is likely not too risky.

18

I’m not sure I’d forget about it.

Keep in mind that you can make buy-ins (even from pillar 3a pillar) into your 2nd pillar pension fund before you turn 65 or retire, thereby increasing your monthly pension. Depending on the pension fund and its conversion rate - and your personal assumption of longevity - this may a good idea.

19

I would do some reading. There are good sources of information in italian, french or english, online, to get accustomed with the concept of investing. While doing that, I would start with a conservative allocation to get my toes dipped and test the waters.

I like VIAC’s account plus (95% cash, 5% stocks) very much as a starting product for people not accustomed to the stock market. It lets us be very slightly invested while doing some reading to discover our risk tolerance but anything with 20% or up to 40% stocks might work. As stated by @nabalzbhf, the built-in risk assessment may help with choosing a starting allocation. I’d feel free to adapt it once/if I feel comfortable with choosing my own allocation.

I’d not dabble with individual funds or personal strategies at first and just use a built-in strategy offered by the 3a provider.

While I agree with @dbu that someone investing in stocks only through their 3rd pillar is going to be mostly conservative once the 2nd pillar and potential other investments (like own home ownership) are taken into account, that only works if we look at our net worth as a global allocation spread across multiple accounts. Many people probably have an account by account view at first, meaning that a sizable drop in their 3a account(s) can trigger emotional reactions even though the drop in their global portfolio is limited.

For someone who knows they’re not going to be phased by a 50% drop over a year and a potential 10 years after that for a recovery, starting with an 80% or 100% stocks allocation might be the right approach.

3 Likes
20

Hi,
I am new to thi forum and to investement in general. I plan to buy a house or an apartment in the next year or so but I don’t want to touch my 2nd and 3rd pillar. I have a 3rd pillar at the BCV but I’d like to think about how I can make my money work without going with a 3a insurance. I read the posts from MP and I understand the benefit of VIAC and finpension.

I still have some stupid questions (sorry I am really a beginner)

  • we can open several 3rd pillar but how does it work? Let’s say I put 2k at the BCV and 5K at VIAC and I provide the proofs to the fisc at the end of the year and that’s it?

  • Do you know how many 3rd pillar we can have max in the Canton de Vaud?

  • I understand that they are different type of products within VIAC and finpension but I am not used to take a lot of risks since I am new to this + I am sensible to my environmental impact. Does anyone have a product to recommend in this case?

  • When you don’t know how the stock market works you’re always told that it is risky and that you can loose everything. It there a real risk that this happens if I invest with products like VIAC or finpension? Of course we won’t never be sure at 100% but what’s your opinion from your experience?

Thanks very much . The above is already super useful