In Switzerland, vested benefits represent an often-underestimated opportunity. Stemmed from pension funds, these benefits are granted when there is a change of employer, a move abroad or the cessation of professional activity. Making the most of these assets allows you to secure and optimise your financial future.
Avoid stagnation of funds
By investing your vested benefits, you prevent these assets from stagnating. . In Switzerland, vested benefits enjoy significant tax advantages. The income generated is not taxed as long as it remains in the pension system, and the capital is exempt from wealth tax, making it a particularly attractive tax planning tool.
Preparing for retirement and other projects
Vested benefits can also help you prepare for retirement or other future projects with peace of mind. Whether you want to supplement your retirement income, become self-employed, finance the purchase of a main residence or repay a mortgage, these funds offer considerable flexibility and financial security, especially in an uncertain economic climate.
Investment options
There are different ways to invest your vested benefits. The choice should be made based on your personal situation, risk tolerance and financial goals. The three main categories are insurance policies, vested benefits accounts and securities portfolio.
Insurance policies
Insurance policies are often seen as a safe solution. Their main advantage lies in the risk coverage they offer and a guaranteed return at the agreed maturity date. However, hybrid solutions combining insurance and savings are often less advantageous in terms of returns. It is generally recommended to separate risk coverage from savings for more effective and personalised management, offering better cost control and optimised returns.
Vested benefits account
The vested benefits account is a popular option thanks to its high liquidity and greater security. Assets in these accounts are protected from market fluctuations, making them a reassuring choice for cautious savers. However, the security they afford comes at a price: returns are often very low or even zero, especially in periods of low interest rates. This type of account is particularly suitable for a very short investment horizon, where capital preservation takes precedence over the search for return.
Securities portfolio
For those seeking higher returns, an investment portfolio is an attractive option. By investing in funds or securities, policyholders can benefit from a higher expected return. However, this option carries risks, including increased volatility and the need for a longer investment horizon to offset market fluctuations. More dynamic savers with a higher risk tolerance and a long-term investment horizon will find securities deposits a suitable solution for their objectives.
Common tax advantages
These three investment options for vested benefits in Switzerland share several common features in terms of taxation:
• The funds invested are exempt from income and wealth tax for the duration of the investment.
• Vested benefits are only taxed at the time of withdrawal.
• Dividends and coupons paid on a vested benefits portfolio are subject to withholding tax, but this tax is generally refundable.
Investment strategies via a securities deposit
Investing via a securities portfolio offers flexibility and a variety of options that can be tailored to the needs and preferences of each investor. Asset allocation funds invest in a mix of assets according to a predefined strategy, offering a balance between risk and return. Active strategies aim to outperform a benchmark index, while passive strategies, such as ETFs, replicate the performance of a specific index at a lower cost.
For modest volumes, passive or standardised solutions are often the most appropriate. For larger amounts, a personalised approach, such as a wealth management mandate, may be more advantageous, allowing for tailor-made portfolio management.
Active, diversified and personalised management
Active, diversified management of vested benefits offers several significant advantages: the pursuit of higher returns in bull markets, better control of losses in bear markets, and an agile, clear and transparent approach aligned with the investor's long-term convictions.
A hybrid approach, combining active and passive management, offers an optimal balance between return, risk and cost. Here is an example of robust combinations based on the principles of the Ordonnance sur la prévoyance professionnelle vieillesse, survivants et invalidité (OPP 2):
• Swiss direct equities: For dividends, clarity and transparency. Swiss equities are often perceived as stable and can offer attractive returns in the form of dividends.
• Passive funds: Ideal for large, efficient markets or to form the core of a portfolio. ETFs, for example, offer diversified exposure at a lower cost.
• Active funds: Useful for accessing niches, Swiss real estate or specific sectors across all asset classes. These funds can offer expertise and diversification that are difficult to obtain elsewhere.
• Direct bonds: Depending on opportunities in the fixed income market, favour CHF bonds to reduce currency risk.
Conclusion
Active and personalised management of vested benefits, combined with a robust hybrid approach, can offer significant advantages in terms of returns, risk control and tax optimisation. It is advisable to consult a financial advisor to develop a strategy tailored to your specific needs.
