Bench pillar 3a experience: Review 2024

Last update: 03.10.2024 15:03

Are you looking for guaranteed security and potential returns for your retirement provision? Our Bench pillar 3a experience could point you in the right direction. In this experience report, we check out the innovative Bench 3a pension product for you. Find out if it’s right for you.

Our Bench pillar 3a experience confirms that it is a new digital and innovative pillar 3a pension solution. It was launched in March 2024. Bench 3a gives you a guarantee on your paid-in assets at the time of retirement; unlike with securities, you know exactly and with certainty how much money you can count on later. At the same time, Bench 3a offers a higher potential return than a classic 3a savings account. In the bench app, you can choose from three different guarantee levels: 80, 90 or 100 percent. With Bench 3a, a new product category is entering the Swiss 3a pension market alongside savings accounts, securities and policies.

Bench 3a is backed by Bench 3a Service AG. The company is a joint venture in which Leonteq AG and Glarner Kantonalbank each hold 50% of the shares. As a service provider, Bench Services AG acts on behalf of the Bench 3a Foundation. Both partners have brought their strengths to the collaboration: Leonteq from Zurich, which specializes in structured products, contributes its technological expertise, for example for the platform and the app. Glarner Kantonalbank is contributing its extensive banking expertise, which it has already demonstrated with other national fintech products (such as the Coop Finance+ solution or its own FreeME). After several years of development work, the partners are now launching an innovative pension solution.

Our Bench Pillar 3a experience shows that it is an easy-to-use app(Android, iPhone). There is currently no web solution.

You can open your account online with your ID or passport. The process is simple and can be completed in 2-3 minutes. You will need a cell phone number. After downloading the app, a playful, optional quiz with 4 questions checks that you have understood the main benefits and fees. Well thought out so that the right customers come to Bench 3a. Our scroller shows you how to get to Bench 3a in three steps.

Enter your cell phone number and you will receive an SMS code. You can then activate Face ID for faster login

Add your name and e-mail address and confirm your place of residence in Switzerland – you can only open an account if you live here.

The date of your retirement is calculated based on the gender and date of birth you enter.

Depending on whether you are affiliated to a pension fund or not, you can pay different amounts into the 3a.

The data is then displayed again in the overview and you can make any necessary adjustments.

So that Bench 3a knows that you are really you, you still have to identify yourself with ID. To do this, take a photo of the front and back of your ID.

Your account will then be prepared. You will be crowned Superman or Superwoman – nice effect.

This is followed by another risk explanation about the guarantee and potential return, which you confirm by clicking the button.

Finally, you accept the legal basis for your pension contract – you’re set!

Everything is ready, now you can get started.

In the app, you will first be asked to confirm your e-mail address. Then click on “Select product”

In my case, 3 alternatives are offered, with a potential return of 1.8 %, 2.7 % or 3.3 % per year. This is already significantly more than the current maximum interest rate on a pillar 3a account.

I have opted for bench 80.

You can now pay into Bench 3a and have the payment slip sent to you by e-mail.

Alternatively, you can also transfer a 3a balance to Bench 3a. The money transporter picture goes well with this😉

Many Swiss prefer a savings account for their 3a investments. In this way, they forgo the growth of their assets until retirement. If you are looking for an uncomplicated solution to benefit from growth opportunities on the capital market and at the same time want certainty as to how much you will receive “at the end”, then Bench may be of interest to you. Depending on the guarantee level you choose and the remaining term until retirement, you can expect around 1-4% potential return per year – after costs. The return opportunity arises because Bench 3a invests part of your 3a payments in Swiss equities.

The solution is designed to appeal to digitally savvy, young and security-conscious target groups. This is underlined by the consistent imagery in the advertising, website and app. The market launch is being supported by a renowned Swiss marketing agency and will be played out exclusively on digital channels.

Bench 3a attacks the market segment of 3a insurance policies and 3a account savers. This is because it offers customers guaranteed assets on withdrawal, but without what we consider to be overpriced insurance cover. In addition, the digital distribution channel eliminates the high costs of the distribution channel for traditional 3a policies, whose acquisition commissions amount to several thousand francs depending on the term.

With Bench 3a, the guarantee applies at the time of retirement. Only then. Strictly speaking, it applies in the month in which you turn 65. If you leave Bench 3a before then, for example because you transfer your 3a assets to another provider or withdraw them for home ownership, the amount paid out may be less than the sum of your deposits.

In the event of an early exit, you will then receive the settlement value. This is the current “sales value” of your credit balance. The settlement value fluctuates and can be above or below your guaranteed amount. It is shown in the app at all times. The payout is usually made within 35 days.

You can also leave your assets in Bench 3a beyond the normal retirement age – if you work longer. You can request the deferral from Bench Support.

Well, that’s explained pretty quickly. Part of your money is invested in a basket of Swiss equities and part earns interest as zero bonds with final maturity on your retirement date. This is why the Bench 3a Foundation can only be sure that at least the insured money will flow back to it at the agreed time. This is why you only receive the Bench 3a guarantee promise on this date. Until then, you bear the risk of fluctuations in value and the chance of an increase in value from the equity basket and the zero bond. Accordingly, the settlement value before retirement may be higher or lower than the amount you pay in, depending on the performance of shares and interest rates.

The Bench 3a product is designed and structured differently to the previously known 3a products. For this reason, the fees cannot be compared 1:1 with those of other providers.

The all-in fee is 0.8 %. This is rather high compared to 3a providers with equity solutions. In return, you get a guarantee – more on this in a moment. Classic 3a savings accounts are free of charge.

The flat fee is charged monthly on the account value and includes all running costs. The actual fee may be lower and is shown in the reporting. A payout at the time of your retirement is free of charge. The Foundation ‘s fee regulations provide for industry-standard expense allowances for special cases (such as withdrawals for residential property).

Our Bench Pillar 3a experience and market expertise show that we can break down the fee as follows:

• 0.0 % standard market administration costs for 3a savings account
• 0.2 % standard market costs for ETF on SMI-Switzerland (e.g. this ETF)
• 0.6 % Residual amount for guarantee & margin Provider

Bench 3a has no minimum deposit. You can deposit from 1 franc. If you do not make any deposits, there are no fees.

Bench 3a does not offer investment strategies, but guarantee levels at the time of drawing. Your guarantee amount at retirement is based on your payments and your chosen guarantee product.

Unfortunately, there is no more precise information on the products “of the Swiss equity market” in which the return portion of the deposits is invested, either in the app or on the website of the new offer. On request, Bench 3a informed us that it is a basket of the most important Swiss equities with fluctuation control. Leonteq’s background as a derivatives specialist suggests that the price performance is replicated synthetically.

Well, that’s a question of personal preference. After all, the Bench 3a guarantee products all cost the same. We assume that bench 80, 90 and 100 invest different proportions in Swiss equities. This is the only way to explain the differences in returns. Accordingly, the guarantee benefit with the bench 100 strategy is the most expensive for the provider – and for you – because more of the guarantee benefit has to be secured for the time of payout.

In general, the lower the guarantee you choose, the higher your potential return – and your potential loss in the event of early termination. This is because if you withdraw your assets BEFORE you retire, the guarantee does not apply.

Bench 3a is a mixture of a savings account with a return boost from the Swiss equity market and an insurance benefit for your deposits. You are therefore unable to influence the selection of securities yourself and make targeted sustainable investments. If this is important to you, you can find suitable providers in the Pillar 3a product finder.

When you retire, you will always get at least your guaranteed amount back. So you can plan with a minimum amount without any worries. You might even get a shot of the performance of the Swiss stock market on top – that’s what sets Bench 3a apart from traditional 3a savings accounts.

VIAC offers a similar product, but without any guarantee of a repayment amount. With the VIAC 3a Account Plus Global, 95 % of your pension assets are held in the 3a account and earn interest at 1.15 % (as at March 2024) per year. The remaining 5 % is invested globally and broadly diversified in equities. This increases the return and the risk somewhat, but there is no guarantee at the time of payout. However, this strategy is free of charge.

If you plan to invest your money until you retire and have at least 8 years to go until then, the bench 100 strategy offers higher potential returns despite the costs, as a look at the calculator on their website shows.

• The guarantee protects your payments on retirement
• Deposits are secured by a cantonal bank with a state guarantee
• Simple and user-friendly app
• Fast opening process that only takes a few minutes and does not require a visit to the bank
• Start from as little as CHF 1
• No “small print” in the fees – the flat fee really does include everything

• “Security has its price.” – the guarantee costs you approx. 0.4 % more than a pure 3a securities solution
• Missing web solution
• unclear how the Swiss equity component will be invested
• You will only receive the guaranteed amount at a certain point in time: your ordinary AHV reference age valid at the time you take out the policy

We find that all solutions have their advantages. We have examined each solution in a separate article(frankly, VIAC, finpension. You cannot directly compare Bench 3a with these equity solutions. This is because with Bench 3a you are obviously interested in a product with “security and opportunity”, which is not comparable in profile with the pure savings or equity solutions of VIAC, Frankly or finpension. The best way to get an idea of the providers is to use ourPillar 3a product finder.

Bench 3a is a real innovation in the Swiss pension market. Our Bench pillar 3a experience shows that it is a combination of a savings book with a return booster through Swiss equities and a guarantee for your deposits. With Bench 3a, you know exactly and worry-free how much you will receive when you withdraw your pillar 3a. At the same time, you have the chance of capital growth until withdrawal. This can be interesting for people who only have a few years until retirement and need their 3a money then, or for people with little experience or confidence in the capital market. The product closes the gap between the need for security and the desire for attractive potential returns. However, as always, there is never a “Foifer und ‘s Weggli” at the same time. You pay for the security with an annual fee that exceeds digital 3a securities solutions, but is significantly lower than the costs of many 3a pension funds from banks.

It will be interesting to see whether Leonteq and Glarner Kantonalbank will be able to muster enough marketing power to take a slice of the 3a pension cake from 3a insurance and 3a savings accounts. In our view, the solution is less interesting for 3a equity savers and, as the exit of other digital pension apps shows, the pillar 3a market is highly competitive.

In our view, the app solution is state of the art. Onboarding in the app works with your cell phone, so it is personalized for you. As with all 3a solutions, your assets are held in a pension foundation, in this case the Bench 3a Foundation. The foundation is based in Glarus (GL). The savings deposit is held at Glarner Kantonalbank. This bank has a state guarantee. Bench Services AG is only responsible for managing the foundation, but does not make any investment decisions or manage the assets. If the foundation were to fail, your pension assets would not be affected because your assets are held by the foundation. The structure is similar to that of other providers of digital pension solutions. You can find out more about the security of pillar 3a deposits in this article. We therefore have nothing to criticize about the security of Bench 3a Pillar 3a.