Report “The 3rd contributor: strong performance underscores resilience of pension funds"

AMAS published its report “The 3rd contributor: strong performance underscores resilience of pension funds” in June. The report sheds light on the vital role the second pillar plays in the Swiss pension system thanks to the long-term effect of capital market returns and the services provided by the asset management industry. It also disproves the persistent and politicized myth that the second pillar is expensive and inefficient compared with the first. In fact, every franc paid into an occupational pension during a person’s career is tripled without any funding from the taxpayer. In addition to employee contributions, employer contributions and the third contributor bolster everyone’s personal pension assets.

The role of asset management in occupational pensions

Since 2004, the third contributor has contributed around CHF 500 billion to the occupational pension scheme, which is around CHF 100,000 per insured person or more than a third of the contributions.

The large contributions from the capital markets enable pension funds to expand their benefits far beyond the BVG mandatory requirements. 50% of insured persons have more than twice as much retirement assets as required by the BVG mandatory requirement.

Asset managers for pension funds must comply with various directives and regulations. They must be licensed and supervised by FINMA. To this end, every asset manager with a mandate from a pension fund must sign an annual written declaration of loyalty and integrity (Art. 51b and 51c BVG and Art. 48f ff. BVV 2, link to OAK directive).

• All asset managers for pension funds are audited and supervised by FINMA.
• Every year, asset managers confirm in writing that the rules of good governance have been complied with.
• The cost transparency rate is 98.9%.