Especially during stock market slumps:

Advantages with dynamic risk management

Tellco’s investment strategy focuses on long-term growth

With its investment strategy and dynamic risk management, Tellco pk aims for balance; the best possible return is to be achieved with the greatest possible security. This combination does not mean maximum profit, but in difficult phases it does not mean big losses either. Especially in economically challenging times, this is very important to many clients.

What is dynamic risk management?

The maximum acceptable risk of the investment strategy is periodically assessed, the market environment is systematically evaluated at regular intervals and a cost-efficient management of the equity quota is pursued. Compared to a static risk management, the share quota can vary more strongly.

Significance for the insured

With dynamic risk management, the risk of underfunding decreases, the return is better in the event of strong and prolonged bear markets and the pension fund remains capable of acting for longer. It can also be said that the insured can sleep more peacefully.

A changing market environment calls for dynamic risk management

The market environment has changed and the requirements for the risk-oriented management and supervision of pension funds have grown. To be successful in this, a professional organisation as well as long-term and performance-oriented instruments are required. The focus is on managing the equity portion of the invested assets, as this makes the largest contribution to risk.

The performance chart clearly shows how the investment strategy behaves during stock market fluctuations. The example shows the comparison to a pension fund with a more aggressive, static investment strategy. To make the data comparable, we had to align the data with our technical interest.

Performance

Less fluctuation in the coverage ratio thanks to long-term focus

It can be seen that after 2021, a very good stock market year, the coverage ratio of the comparison fund was around 5 percentage points higher than that of Tellco pk. If the markets are at a low, the difference is even greater, but with different signs: In 2011, the comparative coverage ratio is 12.5 percentage points lower than that of Tellco pk. The long-term view shows that in strong economic times Tellco pk does not gain quite as much as the biggest winners, but in bad stock market times it incurs fewer losses.

Coverage ratio

Our conclusion

Depending on the market environment, this does not necessarily result in a better return or coverage ratio in the long term compared to static risk management; however, overall and especially in the current period, the advantages clearly outweigh the disadvantages:
Especially in turbulent times, they have the certainty that the fluctuation margin in their investments is kept within limits.

News

Unique: occupational pensions in the hospitality industry

In the hospitality industry, almost everything is governed by a nationwide collective employment agreement, even the benefits and prices for occupational pensions. This is a unique situation which does not necessarily have to be accepted. The alternative solutions for senior management are particularly interesting.

Employment conditions in the Swiss hospitality and hotel industry are governed by the national collective employment agreement for the hospitality industry (L-GAV). In the hospitality sector, this agreement also defines the conditions for occupational pension schemes, which is something that cannot be found in any other industry, explains Joel Levi, pension expert at Tellco pkPRO: “A unique feature is that the L-GAV does not only stipulate the benefits paid out, but also the prices for occupational pension funds. This leads to cross-financing from younger to older employees.”

Considering alternatives

As a result, most pension providers refrain from offering their services to hospitality trades. Consequently, the offering is rather one-sided: occupational pension schemes are almost exclusively managed by the two major trade associations. “The strict L-GAV requirements make sense for the average employee,” explains Joel Levi, “but they make it more difficult to find individualised solutions. Many managers would do well to check the available options and consider alternatives to the major providers.”

Tailored pension solutions

One hotel business, for example, developed a tailored pension solution together with Tellco pkPRO: the employees are insured under the provisions of the L-GAV and also enjoy additional benefits that were worked out with Tellco pkPRO. In addition, the entire senior management team has tailored pension plans. The Managing Director is convinced that this solution is a gain for all employees and makes the company a more attractive employer. It is also reassuring for him to know that his employees are properly insured.

Exceptions to the collective employment agreement

The L-GAV contains exceptions for managers, directors and their family members in addition to various types of businesses, such as canteens which only cater for the companies’ own staff. They could all be insured under better conditions. “Many senior staff don’t even know that this is possible,” explains Joel Levi, “but special pension plans actually make real sense for senior management.”

The most important summarized
  • Alternatives for senior management in the hospitality and hotel industry
  • Scope for tailored pension solutions
  • Exceptions to the collective employment agreement (L-GAV)
Information on the subject
Tellco pk pension solutions Gastro brochure

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Occupational pension Pension fund Companies Gastronomy
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