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

The right pension for a relaxing sabbatical

[Translate to Englisch:]

Career breaks for a round-the-world trip or for further study are popular.
In this context, pension planning is an important aspect that needs to be considered.

Are you toying with the idea of taking a sabbatical? You might simply be wanting to escape everyday life and travel abroad for a longer period of time, pursue your own projects or undertake further education or training. A lovely prospect that many people are considering and starting to plan for, particularly since the pandemic. But before you hand in your notice at work or take unpaid holiday leave, you shouldn’t just be worrying about your project budget: your financial pension situation needs careful thought too. This will ensure that you can also maintain a reasonable standard of living in retirement and not be suddenly confronted with unpleasant surprises. The impact on your pension provision may vary depending on how long the sabbatical is.

Simple pension planning for a short sabbatical

Shorter sabbaticals of up to three months are usually legally covered by old-age and survivors’ insurance (OASI), which means that you are protected throughout the period against risks such as disability and death due to illness or an accident. In this case, your occupational pension provision, the 2nd pillar, also remains unaffected if you stay with your employer. However, before you take your sabbatical, clarify how long your daily sickness benefit and accident insurance coverage are valid for. In order to guarantee an extension of your accident cover, you can usually take out an interim insurance policy through your employer or arrange your own insurance with a health insurance scheme. You should also decide whether to still pay contributions to your pension fund during your sabbatical. This can have a positive impact on your financial situation in the long term.

Open a vested benefits account after resigning

If you resign from your job, you will usually remain protected against the risk of death and disability under your previous employer’s pension fund for another 31 days in accordance with the minimum insurance period. The duration of the pension benefits depends on your pension fund. At best, your pension fund can continue the benefits for up to 24 months while you are on your sabbatical. In some cases, you can continue the insurance with your pension fund on a voluntary basis once your employment contract has been terminated. This requires you to pay the contributions on your own, without support from your employer. The exact conditions and options will vary depending on the pension fund. You can also continue to take out voluntary insurance with the Substitute Occupational Benefit Institution. Once you have resigned, however, you can generally open a vested benefits account during your sabbatical or until you are in a new job. The pension fund capital you have saved up until then will then be transferred into this account.

Pension checklist for a relaxing sabbatical
  • If you continue to remain employed, you should take out an interim insurance policy through your employer so that the obligatory insurance protection for non-occupational accidents can be extended by a maximum of six months.
  • If you leave the pension fund, you can then open a vested benefits account.
  • Where possible, continue to save privately in the period in which you have no pension fund coverage.
  • Ensure you have sufficient insurance protection in case of illness and accident abroad (private insurance).
  • If you are abroad for longer than a year, you should pay the minimum OASI contribution (CHF 514) so there are no gaps in your OASI pension later on. These contributions can be paid in retrospectively for up to five years.
The most important summrized
  • Tips for pension planning during a sabbatical
  • Possible stumbling blocks
  • Checklist
Information on the subject
Pension fund: Insured benefits Tellco Vested Benefits Solution More information on vested benefits

Don't leave your retirement to chance.

Make an appointment now
Back to news overview