AXA is now focusing entirely on semi-autonomous solutions in occupational benefits insurance and will no longer be offering full-value insurance from 2019. This enables us to create a sustainable framework that will be more attractive, fairer and more flexible for companies and their employees than current full-value insurance solutions.
Ongoing low interest rates, a growing redistribution to the detriment of the working population, and a tight investment corset have resulted in increasingly poor value for money under full-value insurance. AXA is assuming its responsibility and converting its BVG full-value insurance into semi-autonomous solutions
Essentially, customers can choose between full-value insurance, semi-autonomous and autonomous solutions.
Under full-value insurance, the insurer covers all the risks. This includes coverage of the investment risks that arise when pension assets are invested in the capital markets. Assumption of all the risks under full-value insurance generally makes it much more expensive.
Under a semi-autonomous solution, there is no investment guarantee. The semi-autonomous option offers more opportunities for returns than full-value insurance and hence the possibility that more money is available on retirement. However, the price you pay is the lack of a guarantee: You bear investment risk.
Larger companies often have their own autonomous pension fund with no risk coverage. The Board of Trustees then makes decisions about benefits, contributions and the investment strategy of the pension fund within the legal framework. In this case, the risk of an autonomous fund is borne by the pension fund or the company and its employees.
People are getting older and older, and as a result, pension obligations are lasting longer. With the semi-autonomous solution from AXA, the redistribution at the expense of the active insured is reduced.
- Better earnings opportunities (higher interest rates on the retirement assets) and associated higher pensions
- Fair price-performance ratio: lower risk premiums plus high security
- Interest rates: Statutory minimum interest plus any supplementary interest
Full-value insurance offers a 100% guarantee on the savings capital and can never become underfunded. However, more stringent investment rules apply than for (semi-) autonomous pension funds, resulting in lower earnings potential. (Semi-) autonomous pension fund solutions have greater freedom to invest. This type of pension fund offers high security, but at the same time significantly more earnings opportunities than full-value insurance.
The disability and death benefits are comparable, and the risk premiums are generally much lower. In this environment, a flexible investment policy offering long-term potential success can be implemented.
When it comes to choosing the right solution, getting advice makes sense. As you're dealing with your employees' retirement capital which is often one of their biggest assets, it is worth carefully weighing up the pros and cons of each solution. AXA is convinced of the merits of the semi-autonomous solution, is assuming its responsibility, and is converting its BVG full-value insurance into semi-autonomous solutions.
As an experienced asset manager, AXA will also continue to manage the pension assets of the Foundation in the future. A renowned global asset manager, AXA is optimally positioned to invest your assets securely.
With future-oriented services, online tools and expertise, AXA reduces the administrative effort of your insured to a minimum so that they can concentrate fully on their day-to-day business.