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  #21  
Old 19.10.2020, 15:13
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Re: Pillar 3a - Funds and shares supermarket

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If I was closer to retirement I'd agree with you. In my early thirties I have a long long time to get back that 25% back.
Once you own property, if that's part of your plans, you can use 3a every five years to downpay the mortgage. That makes it just about the best investment there is given that the return due to the reduced tax is known in advance and guaranteed.
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  #22  
Old 19.10.2020, 15:19
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Re: Pillar 3a - Funds and shares supermarket

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Once you own property, if that's part of your plans, you can use 3a every five years to downpay the mortgage. That makes it just about the best investment there is given that the return due to the reduced tax is known in advance and guaranteed.
Taxation rates going forward are not guaranteed.
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  #23  
Old 19.10.2020, 15:20
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Re: Pillar 3a - Funds and shares supermarket

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Loosening the restrictions on pensions is fairly common globally, but as usual the Swiss are being cautious.

They've moved to a reasonable situation on 3a.

Having seen the mess in the UK with underfunded and simply fraudulent occupational pensions, I have some sympathy with their slowness on pillar 2.
For me the logical thing to do with pillar 2 is to have a relatively conservative default option, possibly with an age/risk dependency (more risk at a younger age).

Then, you should be able to change the default to change your risk tolerance with predetermined strategies, and then even to avoid the prepackaged options and simply to invest in any fund you like - but on your head be it.
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Old 19.10.2020, 15:26
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Re: Pillar 3a - Funds and shares supermarket

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Once you own property, if that's part of your plans, you can use 3a every five years to downpay the mortgage. That makes it just about the best investment there is given that the return due to the reduced tax is known in advance and guaranteed.
I think this is what I will do
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Old 19.10.2020, 15:43
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Re: Pillar 3a - Funds and shares supermarket

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For me the logical thing to do with pillar 2 is to have a relatively conservative default option, possibly with an age/risk dependency (more risk at a younger age).

Then, you should be able to change the default to change your risk tolerance with predetermined strategies, and then even to avoid the prepackaged options and simply to invest in any fund you like - but on your head be it.
Yes, and since we already have AHV in theory you're protected from being penniless.

Perhaps a step in this direction is to have some amount which is relatively conservative (pillar 2a) and the rest being flexible (pillar 2b) but still tax exempt.
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Old 19.10.2020, 15:45
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Re: Pillar 3a - Funds and shares supermarket

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I think this is what I will do
It only makes sense if your pension return is less than your mortgage rate plus wealth tax.

Given current low mortgage rates that would be crap even by old 3a standards never mind new 3a funds.
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Old 19.10.2020, 16:52
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Re: Pillar 3a - Funds and shares supermarket

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If I was closer to retirement I'd agree with you. In my early thirties I have a long long time to get back that 25% back.
You don't have to wait until retirement. There are various options for getting the 3a out early.
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Old 19.10.2020, 17:20
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Re: Pillar 3a - Funds and shares supermarket

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There was an article about pension funds in yesterday Sonntag Zeitung. It suggests that Pillar 3 is crap unless we are within 10 years of retirement. We should invest in the markets instead.

After reading it, I also felt that the super conservative pension regulations in Switzerland exists just so that banks and other providers of investment funds as alternative to the 3a can thrive.
What exactly have they compared against?

Of course if they chose the idiotic active funds by banks (at 2.5% and underperforming the market) that it's a robbery.
With these new solutions you can get much closer to a good diversification (especially paired with your investments outside of the 3rd pillar), and then add the tax-free (or deferred to be precise) dividends, tax refund per year, and remove the still-slightly-too-high maintenance fees.
And you are not too far off from investing outside.

I wouldn't call it crap, it's a close call at worst, but depending on your current income tax rate I'd say.

Last edited by gipfelisturmer; 19.10.2020 at 17:39.
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Old 19.10.2020, 18:06
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Re: Pillar 3a - Funds and shares supermarket

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Thanks. I wasn‘t aware of Finpension. Frankly doesn‘t seem that great to be honest. Is Finpension backed by CS or does it just use them as a custodian (like VIAC), as they say on their website that they are independent.

While they don‘t have the same range of funds and they choose for you, their pre-defined 100% equity mix isn‘t too far away from what I would choose myself and they appear to be cheaper than VIAC and have some tax advantages too. I may put next year‘s pillar 3 contributions with them.

ETA I see now that you can indeed choose your own funds with Finpension, although it‘s not as obvious or intuitive as with VIAC.
Same tax advantages as VIAC
https://viac.ch/en/academy/lower-fee...igher-returns/
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  #30  
Old 20.10.2020, 16:37
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Re: Pillar 3a - Funds and shares supermarket

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Taxation rates going forward are not guaranteed.
Not a formal one of course. But given how long changing one takes you're on the safe side when acting on it.
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  #31  
Old 23.10.2020, 12:22
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Re: Pillar 3a - Funds and shares supermarket

I didn't actually know about the early withdrawal fee from VIAC (and Finpension as mentioned).

I imagine it might be possible, before withdrawing, to transfer the pension to a cash account at a bank (e.g. UBS), and then withdraw? I don't believe they have an early withdrawal charge.
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Old 23.10.2020, 12:44
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Re: Pillar 3a - Funds and shares supermarket

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I didn't actually know about the early withdrawal fee from VIAC (and Finpension as mentioned).

I imagine it might be possible, before withdrawing, to transfer the pension to a cash account at a bank (e.g. UBS), and then withdraw? I don't believe they have an early withdrawal charge.
I am sure you will, I paid 500 every time I moved my CH Pillar 2 & also 500 on redemption. I can't think they will rip you off less with Pillar 3
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Old 23.10.2020, 13:47
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Re: Pillar 3a - Funds and shares supermarket

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I am sure you will, I paid 500 every time I moved my CH Pillar 2 & also 500 on redemption. I can't think they will rip you off less with Pillar 3
moved from PF 3a to Viac and there was no fee.
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Old 23.10.2020, 14:35
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Re: Pillar 3a - Funds and shares supermarket

Moving between different 3rd pillar providers should be free.
(Early) withdrawal from it will be charged, I believe with every provider (and would be surprised if UBS wouldn't charge it TBH )
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  #35  
Old 23.10.2020, 14:57
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Re: Pillar 3a - Funds and shares supermarket

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moved from PF 3a to Viac and there was no fee.
I also moved from UBS to VIAC for free
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Old 23.10.2020, 14:59
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Re: Pillar 3a - Funds and shares supermarket

Additional question (will ask VIAC directly if nobody knows):

With VIAC you can have multiple accounts one login (for spreading withdrawals for tax reasons).

Now I'm thinking, will they charge 300 CHF to early withdraw from each of those? Could add up to a significant amount if you have many accounts.



By the way, just found out UBS also charge 300 CHF for early withdrawal: "You pay a fee of 300 Swiss francs per account. "
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Old 23.10.2020, 15:09
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Re: Pillar 3a - Funds and shares supermarket

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Additional question (will ask VIAC directly if nobody knows):

With VIAC you can have multiple accounts one login (for spreading withdrawals for tax reasons).

Now I'm thinking, will they charge 300 CHF to early withdraw from each of those? Could add up to a significant amount if you have many accounts.
Adds up to CHF 1500. More than 5 accounts are not needed for regular withdrawal. If you expect or plan early withdrawal than it does not make sense to have multiple accounts.
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  #38  
Old 23.10.2020, 17:26
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Re: Pillar 3a - Funds and shares supermarket

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Additional question (will ask VIAC directly if nobody knows):

With VIAC you can have multiple accounts one login (for spreading withdrawals for tax reasons).

Now I'm thinking, will they charge 300 CHF to early withdraw from each of those? Could add up to a significant amount if you have many accounts.



By the way, just found out UBS also charge 300 CHF for early withdrawal: "You pay a fee of 300 Swiss francs per account. "
You can close them one by one as needed after retirement. Spreading the withdraal then will reduce your tax. Have not done the maths but likely that the saving is more than the 300 CHF.

But early withdrawal is different.
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  #39  
Old 23.10.2020, 19:22
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Re: Pillar 3a - Funds and shares supermarket

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There was an article about pension funds in yesterday Sonntag Zeitung. It suggests that Pillar 3 is crap unless we are within 10 years of retirement. We should invest in the markets instead.

After reading it, I also felt that the super conservative pension regulations in Switzerland exists just so that banks and other providers of investment funds as alternative to the 3a can thrive.
Can you link that article? From what I know (and also what I read), pillar 3a can be effective both if you're close and far away from retirement:
  • Close to retirement: you benefit mostly from income tax deductions (in essence you make a return equal to your marginal tax rate, which you save)
  • Far from retirement: you benefit mostly from tax exemption on dividends
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