How bad is your pension fund?

A few years ago, I was shocked by how badly my pension fund was performing. With the stock market having record double digit returns year on year, I was expecting similiar returns in my pension fund having chosen the most aggressive options. I was disapointed to find that it only average around 1.6% return each year.

It seems that this is not unusual, I found this ranking:


They are only allowed to invest in very conservative and thus low-yield investment-vehicles.

Swiss government bonds and Swiss real estate is their staple.
If it wasn’t for the real estate, the returns in the last decade would have probably been close to zero or negative.

It’s by design.

That’s why a a number of people take out all the money to buy real estate and invest as much of their other money as they can.

AFAIK, for executives, you can have special vehicles that invest more stock market oriented. But not for “normal” employees.

Our company does that with our pension company but it’s not exclusively for executives, it just has a higher threshold, then they move whatever is above that threshold into the special vehicle. I think I’ve got about CHF 2.50 in it… :laughing:

I know pension contributions are good if your company provides good matching contributions but you can get more investing in funds. 3 Säule allows riskier investments. Our pension generates 4 or 5% growth but we only get 1 or 2%. That I’ll never understand

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Agree it’s really dire.

My past 2 companies have had this 2 tiered pension system:

  1. basic (governed by law and super safe)
  2. 1A or 1E plans that cover salary above basic plan and you can choose your own investments strategy.

Issue with number 2 is if you leave the company or are made redundant and you happen to leave at a market downturn, then you are in trouble…. And it also pays a lot less than expected and charges lots of fees. Also these types of companies don’t lans only allow for capital withdrawals, no pension.