Pillar 3

Personal Risk Check & Guide to Investment

    Background to the Swiss Pension System

    The Swiss pension system is based on three pillars. Your 1st Pillar is the basic state pension. Your 2nd pillar is your occupational pension funded by your employer and yourself. The 3rd Pillar provides an environment for you to take personal accountability for investing in your own pension provision.

    Switzerland encourages saving in the 3rd Pillar environment with significant tax incentives. The aim here is to habituate earners to live on less than their full salary through disciplined saving. This approach is designed to lessen the experience of any disposable income drop upon retirement and to protect earners and their families from the impacts of old age, disability or untimely death.

    PILLAR 3a and PILLAR 3b

    Third Pillar provision is divided into two parts. Pillar 3a provides tied pension provision. Pillar 3b provides flexible pension provision. The federal government supports Pillar 3a by means of fiscal policy measures and the promotion of home ownership.

    Employed persons who are members of a pension fund may pay a maximum of CHF 7,056 annually into Pillar 3a and benefit from tax relief of the payment. Self-employed persons may pay a maximum of 20% of their net earned income into Pillar 3a, subject to a ceiling of CHF 35,280.

    Pillar 3b includes all savings, savings accounts, bonds, money market investments, equities, investment fund units, and residential property. Capital-accumulating life insurance policies in 3n benefit from tax privileges in some Cantons under certain circumstances.

    In order to advise you properly, we need to know more about your risk tolerance, investment goals and investment time horizon. Please take the necessary time to answer the questionnaire. Please tick the statements that are true or correspond best.

    Questions 1 to 7 serve to take stock of the key aspects of your personal investment environment and planned investment horizon.

    Please state your age:

    Which of the following statements best describes your present expenditures situation (rent, your children’s education and training, mortgage, holiday plans, etc.)?
    If you were to lose your regular income overnight, how long would you be able to finance your customary living standard? In answering, assume that you do not want to sell any long-term assets (real estate, securities, etc.).
    In the next 5 years, do you expect your income to:
    How much are your net total assets currently worth (real estate excluded)?
    How much experience do you have with different forms of investments?
    How long is your investment horizon with regard to the planned strategy?
    Questions 8 and 9 serve to establish your capacity for risk within your investment horizon.
    As the following examples show, the higher the expected returns, the higher the risk; this therefore presupposes a higher capacity for risk. These examples are hypothetical and disregard the current market situation. Which of the following statements applies best?
    Let us assume that you have opted for an investment involving a certain risk. After initial gains, your investment starts making a loss. How would you react assuming that your personal investment environment and time horizon under questions 1 to 7 have not significantly changed?

    Thank you, based on your selected options, your risk assessment score has been provided below. Please continue to review your risk check evaluation to see which risk level your score matches.

    Your Total

    Risk Check Evaluation

    From 0 to 20 points or elimination based on question 8 (Risk Level 1)

    Your risk profile only allows for a deposit investment or 100% capital guaranteed investments

    From 21 to 33 points (Risk Level 2)

    Conservative Risk Profile: A conservative investor is one who is prepared to accept a small amount of risk, but the priority remains the preservation of capital over the medium to long term. He/She may have some understanding of investments markets; however, he/she cannot afford to take any chances with his/her capital.

    From 34 to 46 points (Risk Level 3)

    Balanced Risk Profile: A balanced investor has some understanding of investment behaviour and can accept moderate short-term risk to his/her capital. He/She does not wish to see his/her capital eroded by tax and inflation and is prepared to take moderate short-term risk with equities in order to gain longer term capital growth.

    From 47 to 60 points (Risk Level 4)

    Dynamic Risk Profile: A dynamic investor understands the movement of investment markets. He/She is most interested in maximizing long term capital growth, although he/she does not wish to make unbalanced investment decisions. He/She is happy to sacrifice short term safety in order to maximize long term capital growth from international markets.

    I hereby confirm that I have not been guaranteed any returns and that I have been made aware of the fact that positive past performance does not guarantee positive future performance. I am also aware that securities investments can produce losses (e.g. on prices, interest rates, foreign currencies or counterparties) and that I alone bear that risk. By signing the form below you agree that you were explicitly informed about the following key points during the consultation for life and pension insurance and unit-linked life insurance.

    • Insurance benefits, premium, contract term
    • Bonus distribution is not guaranteed
    • Surrender values in the event of premature termination (table of surrender values)
    • Clarification of the risk (fund performance, current risk, profit and loss possibilities)
    • Risk appetite / risk capacity and investment horizon were discussed