Pensions & Health

Voluntary Pillar 3a: more popular than changes to second pillar

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Interest in the topic of pensions has increased again slightly among the Swiss population. Pillar 3a is the most popular option for closing the pension gap. These are the conclusions of the ninth study conducted by AXA Investment Managers Switzerland into the Swiss population’s level of knowledge and views on 2nd pillar insurance.

For the ninth time, AXA Investment Managers Switzerland has conducted a survey into the Swiss population’s level of knowledge and views on the “second pillar” of the pension system. The study shows that interest in the topic of pensions has again increased slightly among the Swiss population. It also concludes that payments into the tax-privileged Pillar 3a are the preferred corrective measure for safeguarding retirement provision. Pension reductions and an increase in the retirement age continue to be respondents’ least preferred options. This year’s study additionally explores the situation facing women when it comes to occupational pensions.

Positive self-assesment

Dr. Werner E. Rutsch, Head of Institutional Business at AXA Investment Managers Switzerland, explains: “After falling in 2017, the year in which the referendum on the ‘2020 retirement reform’ was held, people’s interest in the subject of pensions has returned to the level of previous years. 78% of respondents said they were interested in the subject of retirement provision – that’s the highest figure since 2013, the year in which the survey was first conducted.” Interest is highest among actively insured persons aged between 42 and 65, where the figure is 90%. On the whole, retirement provision is a more important concern for people of working age than it is for retired persons. In addition, people’s interest rises in line with income.

Deciding whether to draw a pension or take out a lump sum when you retire has far-reaching consequences

Dr. Werner E. Rutsch, Head Institutional Business bei AXA Investment Managers Switzerland

Nearly four-fifths of people insured with a pension fund consider themselves to be “very well” or “fairly well” informed about occupational pensions. This positive self-assessment has remained stable in recent years. It slightly contradicts the fact that just 34% of all respondents – 41% of men and 27% of women – know the exact level of pension fund assets they have accrued. 26% – one in five men, and one in three women – state that they have no idea what the figure is. Based on their own responses, men are significantly better informed about the level of their pension fund assets than women, while actively insured persons between the ages of 42 and 65 are the best-informed.

Smaller lump-sum withdrawal

“Deciding whether to draw a pension or take out a lump sum when you retire has far-reaching consequences, with many insured persons underestimating their life expectancy and the associated costs,” says Rutsch. Only one in ten of the survey respondents would opt for a pure lump-sum withdrawal if they reached retirement age today. Two years ago, that figure was as many as one in five. More than half (54%) want their pension fund assets to be paid out in the form of a monthly pension, while one in three would currently opt for a combination of pension and lump-sum withdrawal. Men are more likely than women to favor withdrawing all their money as cash, while this payment option is most popular among the 25-41 age group (15%). The more left-wing they are politically and the lower their income, the more likely respondents are to prefer drawing a monthly pension.

And what about women?

The pension fund studies conducted by AXA Investment Managers Switzerland are based on a representative sample of employed, actively insured persons. People who are not insured with a pension fund were also questioned this year. With women accounting for 68% (versus 47% in the basic group), the focus group of non-insured persons is more female and slightly less well educated than the group of insured persons. Both groups were asked to assess whether the AHV needs to be supplemented by additional savings in order to safeguard pensions (right answer: true), whether the money saved by part-time workers in Pillar 2 is too little to maintain their future standard of living (true), and whether in the case of unmarried couples it is enough for one person to save for their retirement provision because the second is automatically insured for old age (false). These questions were correctly answered by between 72% and 88% of the respondents. 40% of all respondents answered “true” to the question of whether all employed persons are insured with a pension fund (false).

In total, the responses given by the focus group of non-insured persons on the knowledge questions were only marginally poorer than those given by the insured people. There were no identifiable differences between the genders. However, when it came to knowing the entry threshold for a pension fund (CHF 21,330), the non-insured persons did better than the insured persons. In addition, more than half the respondents in both groups gave too low a figure for the minimum annual salary required in order to join a pension fund.

Personal responsibility to close pension gap

The study also examined options for closing the pension gap in the case of part-time workers, as well as mothers and fathers who forgo paid work for a period of time in order to look after children. Making tax-privileged payments into Pillar 3a proved the most popular option, with 33% of insured persons and 38% of uninsured persons proposing this course of action. Additional voluntary payments into a pension fund when they start working again were cited by 25% of insured persons and 19% of uninsured persons; independent, non-tax privileged “personal saving” is favored by 23% and 21% respectively. Voluntary Pillar 2 payments by the partner are accorded a lower priority by both groups. There were no significant differences between the genders, although men tend to choose Pillar 3a and additional payments into the pension fund. Women tend to favor independent saving and contributions by their partner. Around one in five respondents do not know how they can close the pension gap. Overall, there was evidence of a clear trend to personal responsibility.

Pension gaps have far-reaching consequences in later years

Dr. Werner E. Rutsch, Head Institutional Business bei AXA Investment Managers Switzerland

A person’s marital status, rather than their gender or status as “insured” or “uninsured”, is likely to determine whether they consult an advisor in order to have their pension situation analyzed: 57% of married actively insured persons have obtained advice, either alone or in conjunction with their partner. The figure is only 37% in the case of single actively insured people, while among divorced or widowed persons it is 44%. Wealthier people are more likely to seek advice than people with fewer assets and lower incomes.

Werner Rutsch concludes: “The topic of retirement provision in general – but also the best way to close pension gaps – is set to grow in importance. Pension gaps have far-reaching consequences in later years. The high acceptance and popularity of Pillar 3a solutions is encouraging, but the fact that people with lower incomes and smaller pension pots tend not to seek advice is worrying.” 


The full results of the survey are available in German online 

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