When saving in pillar 3a, you also have the option of investing your money in funds in addition to the traditional savings account. For some time now, these have also been available with a higher equity component. Let’s take a look at how you can make even more of your money with 3a securities savings.
When investing money, the basic rule is “higher expected return = higher risk”. If you opt for a fund solution in the 3rd pillar, you invest your money in productive capital, i.e. your money is invested in companies, for example, and “works” there. Accordingly, you participate in increases in value – or losses – on the financial market. That’s why you generally envisage a longer investment period of 7 to 10 years or even longer for your 3a pension fund. Regularly investing your 3a pension contributions in 3a pension funds can thus generate a higher final capital than an investment in a savings account – but you have a corresponding risk of fluctuations in value.
Depending on your risk appetite, you can choose pension funds with different proportions of equities
The proportion of equities in the pension fund is indicated by the additions in the name. The figures 25, 35, 45, 67 or 75 are indications of the strategic equity allocation of the pension fund. This has only been allowed to exceed 50 percent since 2008. For this reason, there are no evaluations of the 10-year performance of pension funds with a high equity ratio.
Historically, the majority of pension fund assets have been invested in actively managed funds. In these funds, the fund management selects investments itself – i.e. “actively” – and attempts to achieve a higher return than is generated by an investment in the benchmark index. In contrast, exchange-traded funds (ETFs) are content with the return of an index. They only “passively” track this index. ETFs are therefore characterized by much lower fees than active funds. You can find out more about investing in and selecting ETFs in this article.
ETFs have also been finding their way into pension provision for some time now
Passive 3a pension funds are combined from various ETF products so that they cover different regions and asset classes. In pillar 3a, the lower fees benefit the compound interest effect particularly strongly due to the long investment horizon. While active 3a pension funds charge annual fees (so-called total expense ratio) of up to 1.6 % to the fund assets, these are between 0.38 % and 0.94 % depending on the passive 3a pension fund. In the best case scenario, you can even get away with 75% lower costs!
Our tip:
3a Securities investments have a long-term investment horizon in which costs and returns play a major role. Passive pension funds have lower costs and therefore a higher return. If you save in 3a securities, passive products are therefore a good choice.
The table below gives you an overview of the best current passive 3a pension funds with their corresponding equity component. As a reminder: the higher the equity component, the higher the risk of fluctuations in value. Most of these funds are subject to front-end loads and sometimes also redemption fees. These fees are also charged for active 3a pension funds, but higher management fees are added. The TER value (Total Expense Ratio) tells you how high the fund fees are.
| Passive pension funds | Max. Share quota in % | TER in % |
| Swisscanto (CH) Pension Fund 20 passive | 20 | 0.43 |
| Postfinance Pension 25 | 25 | 0.87 |
| UBS Investment Foundation BVG-25 indexed (hedged in CHF) | 25 | 0.28 |
| CSA Mixta-BVG Index 25 | 30 | 0.9 |
| CSA Mixta-BVG Index 35 | 40 | 0.9 |
| UBS Investment Foundation BVG-40 indexed (hedged in CHF) | 40 | 0.28 |
| Swisscanto (CH) Pension Fund 45 passive | 45 | 0.44 |
| Postfinance Pension 45 | 45 | 0.96 |
| CSA Mixta-BVG Index 45 | 50 | 0.9 |
| Raiffeisen Index Fund – Pension Growth | 67 | 0.84 |
| Swisscanto (CH) Pension Fund 75 passive | 75 | 0.38 |
| Postfinance Pension 75 | 75 | 1.06 |
Source: fundinfo.com, April 2018. The overview is not a recommendation or invitation to buy individual products.
Are you interested in one of these funds? Then you are dependent on your custodian bank offering you this product at all, because you cannot buy pension funds freely on the stock exchange.
For example, Credit Suisse offers the CSA Mixta BVG funds, Postfinance its Postfinance Pension products, which are managed by UBS. As a Raiffeisen customer, you (only) benefit from their products, and at the cantonal banks you are generally offered a Swisscanto product, even though they have been fully owned by Zürcher Kantonalbank since 2014. However, there are also providers where you can invest in various active and passive 3a pension funds (e.g. also the products of the UBS Investment Foundation) or put together your own 3a pension fund from ETFs using a robo-advisor solution.
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Last update: 08.12.2024 13:56
