If you change jobs, you are legally obliged to contribute your vested benefits credit to the new employer’s pension plan. Since the benefits of the various Pension Funds differ, it is possible that you may bring more retirement capital than necessary for the maximum purchase in the new Pension Fund. You can decide where you want to transfer your excess funds: to the new pension fund – or to an independent vested benefits foundation tailored to your individual needs.
If you decide to transfer your assets to a vested benefits foundation (VB Foundation), you protect your retirement capital from redistribution. Persons insured in the extra-mandatory pension are particularly affected by this, as the redistribution can cost them several percent in annual returns.
There are also advantages in terms of investments, as the investment strategy can be tailored to your individual needs. With a high risk capacity, it is possible to implement an investment strategy that focuses exclusively on equities and real estate investments. The focus can also be placed on investments that generate high direct distributions, which, unlike free assets, are not subject to income tax. All securities and interest income generated is credited to your personal retirement savings account and cannot be used to cross-finance excessive pension benefits.
Last but not least, under certain conditions a vested benefits foundation allows a staggered withdrawal of your pension assets, which in many cases leads to considerably lower capital withdrawal taxes.
Things to consider
Review of death and disability risks
The coverage in the event of death and disability must be clarified in connection with the new vested benefits institution. Gaps in coverage must be analysed and closed.
Selection of the appropriate investment strategy
The investment strategy must be in line with your personal risk capacity and risk tolerance and will be developed by us in a personal discussion with you.
Selection of the appropriate vested benefits foundation
The services provided by the various foundations sometimes differ considerably. It takes a lot of time and expertise to choose the solution that best suits your needs.
The core of the selection process is our know-how and our database on the vested benefits foundation market. After we have evaluated your needs and your ability and willingness to take risks, the actual search and comparison process of the various offers takes place.
Once the appropriate foundation has been selected, the relationship begins with monitoring the transfer of funds, followed by the start of asset management and ongoing performance monitoring (periodic reporting meetings).
Due to the intense competition in the field of vested benefits foundations, we recommend reviewing the structure set up every three to five years. This will ensure that your pension assets always prosper under the best conditions.