Vested benefits comparison : How to find the best account !

You have just received a letter from your former pension fund asking you to transfer your vested benefits? You don’t know how to open your vested benefits account? You’re unsure where to transfer your vested benefits?

Here are the 3 important tips to find the best vested benefits account in 2024 :

What is a vested benefits account?

It can happen that for a Swiss citizen or a cross-border worker, their Swiss pension fund contributions are converted into vested benefits.

Indeed, for various reasons, one may need to open and transfer their vested benefits account:

• Leaving Switzerland for a permanent departure
• Becoming self-employed in Switzerland
• When facing unemployment in Switzerland

All these situations require you to open a vested benefits account and therefore compare vested benefits accounts.

Why compare vested benefits accounts?

Indeed, at Suisse libre Passage, we specialize in comparing vested benefits accounts.

It’s important to be able to choose the most suitable vested benefits solution for your profile in order to select the best vested benefits account.

The key aspects to consider when comparing vested benefits:

• Interest Rate: A highly crucial factor as it will determine whether you can mitigate the rising cost of inflation each year and especially whether your vested benefits account can grow or not.

• Canton of the Seat of the Vested Benefits Foundation: Another significant consideration, as in the case of a permanent departure from Switzerland and depending on the country, you may have the opportunity to reduce taxation on the withdrawal of capital from your vested benefits account.

• Account Maintenance Fees: For several years, typically including 2021, foundations have been applying varying degrees of account maintenance fees, generally averaging around 36 Swiss francs per year. This should be taken into account when comparing vested benefits accounts in 2021, as you might occasionally risk losing capital from your vested benefits provision.

How can I verify if my vested benefits foundation has a negative interest rate?

It’s always important to look at the interest rate of vested benefits accounts when conducting a comparison.

Negative interest rates do not exist in Swiss vested benefits accounts; applying negative interest rates to Swiss pension accounts is prohibited.

However, be sure to carefully examine the various fees, as at certain amounts, you may unfortunately incur a loss of capital in your vested benefits account.

How to study a comparison of vested benefits accounts?

You can do it through your bank, insurance company, or even through the supplementary institutional foundation.

However, there are several aspects to consider in order to find the best vested benefits account:

• You can utilize our service to create a vested benefits account for you directly through the contact page, free of charge.
• Decide whether you want to invest your vested benefits account or not.
• Properly study the different interest rates offered by vested benefits foundations.
• Take into account any potential fees; generally, vested benefits foundations are very transparent in this regard.

The various vested benefits foundations in Switzerland:

When one wants to manage their different LPP contributions and thereby obtain a comparison of vested benefits accounts, it’s essential to first know the list of various vested benefits foundations in Switzerland.

Here is a list of the main vested benefits foundations in Switzerland:

• Aargauische Kantonalbank
• acrevis Bank AG (Rendite) 
• acrevis Bank AG (avenirplus) 
• AEK BANK 1826 Genossenschaft (Rendita) 
• AEK BANK 1826 Genossenschaft (avenirplus) 
• Alpha RHEINTAL Bank AG (Privor) 
• Alpha RHEINTAL Bank AG (avenirplus) 
• Alternative Bank Schweiz AG 
• Appenzeller Kantonalbank
• Baloise Bank SoBa AG 
• Banca dello Stato del Cantone Ticino 
• Bank BSU Genossenschaft 
• Bank Cler AG 
• Bank EEK AG
• Bank EKI Genossenschaft
• Bank Gantrisch Genossenschaft
• Bank in Zuzwil AG
• Bank Leerau Genossenschaft 
• Bank Linth LLB AG 
• Bank Oberaargau AG 
• Bank SLM AG (Privor)
• Bank SLM AG (avenirplus)
• Bank Sparhafen Zürich AG 
• Bank Thalwil Genossenschaft 
• BANK ZIMMERBERG AG 
• Banque Cantonale de Fribourg 
• Banque Cantonale du Jura SA 
• Banque Cantonale du Valais 
• Banque Cantonale Neuchâteloise 
• Banque Cantonale Vaudoise 
• Banque Cantonale Vaudoise (avenirplus) 
• Basellandschaftliche Kantonalbank 
• Basler Kantonalbank
• BBO Bank Brienz Oberhasli AG 
• Berner Kantonalbank AG 
• Bernerland Bank AG 
• Bezirks-Sparkasse Dielsdorf Genossenschaft 

The decreasing interest rates of vested benefits accounts?

It’s true that when comparing vested benefits accounts in 2010, the interest rates were significantly higher, and there were plenty of options to choose from.

There are even older vested benefits policies with interest rates of 3% in certain foundations.

Due to varying monetary policies and certain economic crises, the returns and interest rates of vested benefits accounts have been declining year after year.

• 2011: 2% interest rates on vested benefits accounts
• 2012: 1.5% interest rates on vested benefits accounts
• 2021: 0.01% interest rates on vested benefits accounts
• 2023: 0,2% interest rates on vested benefits accounts

The vested benefits interest rate:

There are many options concerning your vested benefits provision. Indeed, the interest rates for your vested benefits can vary depending on the vested benefits foundations.

Typically, the interest rate for a vested benefits provision is around 0.2%, with varying fees for a non-investment solution. Opting for a vested benefits solution with investments can yield returns averaging around 3% to 5% per year.

The average interest rate of vested benefits accounts in 2023?

Indeed, through various comparisons of vested benefits accounts in Switzerland, one can determine the average interest rate of these accounts.

The average interest rate of vested benefits accounts in Switzerland is approximately 0.2% in 2023.

This is significantly lower than the average returns of vested benefits foundations with investments, which range from 2% to 3% depending on the different vested benefits investment portfolios

A vested benefits account at a bank or an insurance company?

Indeed, when comparing vested benefits accounts, there are various institutions to consider.

So, should you open a vested benefits account with an insurance company or a bank?

Vested benefits account with an insurance company:

• Provides security against disability or death risks.
• Interest rates are generally lower.
• Fees can vary based on the insurance company.

Vested benefits account with a bank:

• Offers more freedom in account management.
• You can transfer the account as you wish.
• Allows for potential investment opportunities.
• May provide slightly better returns compared to insurance-based accounts.

When do banks update their interest rates on vested benefits accounts?

This can indeed vary for each bank or vested benefits institution.

It’s important to thoroughly check these details when comparing vested benefits accounts.

However, vested benefits foundations usually inform you when there’s a change in interest rates or when they introduce fees.

The investment horizon of your vested benefits account:

Indeed, if you choose an investment solution, you can benefit from market opportunities and achieve returns of around 3% per year.

However, it’s important to consider your investment horizon for your vested benefits provision.

Prefer an investment horizon for your vested benefits account of 3 to 5 years to ensure security and to comfortably enjoy your returns.

How many different vested benefits accounts can one have?

The law states that you can open two vested benefits accounts. Indeed, having two different vested benefits accounts can be beneficial when comparing such accounts.

This is referred to as the splitting method, which allows for significant tax reductions when withdrawing funds from vested benefits accounts from one year to another.

Support for your vested benefits transfer:

Being supported for your vested benefits transfer is crucial. Choose to be guided by a vested benefits professional to assess accumulated returns each year.

It’s also essential that your advisor tailors their strategy for your vested benefits to your profile, ensuring no unpleasant surprises.

Investing your vested benefits account?

Indeed, we’ve seen that very low interest rates and additional fees, such as account maintenance fees, make comparisons of vested benefits accounts quite challenging.

So, why not consider investing your vested benefits account? However, there are important factors to carefully consider for this option.

Indeed, certain vested benefits foundations offered by private banks allow for investing vested benefits accounts, resulting in significantly higher returns than the previously mentioned 0.2%.

Adhering to OPP2 regulations, these vested benefits foundations offer various investment portfolios with varying percentages of equities. The advantages of investing your vested benefits account are numerous:

• Returns averaging between 2% to 5% depending on the years.
• Different investment portfolios.
• Personalized management and guidance for your vested benefits account.
• Potential environmentally-friendly and sustainable development-oriented investments.

However, it’s important to note that a longer-term investment horizon and a strategy tailored to your profile are necessary. You can find more details on the vested benefits page of our website.

To receive guidance in choosing your vested benefits provision and benefit from a comparison of vested benefits accounts, don’t hesitate to fill out the form below!