Many investors believe their pension strategy is aligned with their objectives, investment horizon and personal circumstances. In practice, however, a significant share of second-pillar pension assets remains invested in relatively cautious approaches, often with a strong weighting towards bonds and limited exposure to equities.
This positioning is frequently adopted by default and is not always reviewed over time. Yet, within a long-term investment horizon, portfolio composition can have a meaningful impact on the evolution of capital.
At the age of 40 or 45, there are often still several decades remaining before retirement. In this context, certain asset classes, such as equities, may contribute to capital growth potential, while naturally involving higher levels of risk and volatility.
Until recently, strategies with significant equity exposure were mainly associated with third-pillar pension solutions.
Today, certain vested benefits solutions as well as so-called bel-étage plans also offer greater flexibility when defining an investment strategy.
Bel-étage plans notably concern the portion of salary exceeding CHF 136,080 (current threshold subject to change) and may, in certain cases, allow for a more personalised allocation based on the investor’s investment horizon, wealth objectives and individual circumstances.
Over the long term, allocation choices can have a significant impact on the evolution of capital. Historically, portfolios with higher exposure to equities have offered greater return potential than more defensive approaches, although with more pronounced fluctuations and increased risk of loss.
Any strategy should therefore be assessed in light of each investor’s risk capacity and risk tolerance, as well as their personal and wealth-related objectives.
Current solutions also make it possible to progressively adapt allocations according to changes in personal, professional or financial circumstances.
It is therefore possible to review exposure to different asset classes over time in order to maintain consistency between investment strategy, investment horizon and risk sensitivity.
Pension planning is a long-term investment that deserves to be reviewed regularly.
In an ever-changing market environment, it may be worthwhile considering whether one’s current strategy remains aligned with their actual investment horizon and wealth objectives.
A personalised review can sometimes help identify optimisation opportunities suited to each individual situation.