What is a pension fund?
A pension or retirement fund, is a long-term savings and investment scheme that allows employees to make regular contributions during their working lives to finance their retirement. Provident funds are often managed by specialist companies or financial institutions such as banks.
Pension fund advantages
Pension funds offer several advantages if you contribute to them. Firstly, contributions are tax-deductible, which can reduce your annual tax bill. In addition, provident funds are generally invested in long-term assets such as shares, bonds, and property, which can generate a higher return than traditional savings accounts.
In addition, pension funds can offer you financial security when you retire. They can also provide additional benefits such as annuities or insurance for you and your family.
Note that as an employee, you are compulsorily affiliated via the second pillar, from an annual salary of CHF 22,050.
How does a pension fund work?
Pension funds work by collecting regular contributions from members and investing them in long-term assets to generate a return. As a member, you can sometimes choose the level of contribution you wish to make and the type of pension plan you want.
Provident funds are financed by employers and employees, usually on a 50/50 basis. Employers may also offer more prominent than equal contributions to encourage employees to contribute more.
Everything you need to know about the second pillar contribution system.
Provident funds may be managed by a pension fund management company or a financial institution like a bank. The fund managers are responsible for managing the investments and ensuring the funds are used under the governing rules. This institutional management must comply with BVV2 standards.
Our range of funds meets the essential criteria of diversification, liquidity, and risk management.
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