Idea for the second pillar: Choice between 2nd pillar chosen by employer and a vested benefits account

[ale4614]

As the pension fund of my employer has given me an interest of 1% for 2023 on my money invested there (and the years before were not much better - mostly just the BVG minimum), I have been looking into other pension funds. I found this comparison by some organisation. It seems to me that most pension funds over the last five years have averaged between 1 and 2.5 percent in interest, while the MSCI world has averaged a return of 8 percent or so. We pay more money into the second piller than the first one and it just withers away.

The idea is to enact a legal change, so that we can have a choice between the 2nd pillar as chosen by our employers and a vested benefits account (like the ones viac or finpensions provide), where we can choose our own strategy. I know this is most likely a futile endeavour, but I'd like to try, I'll probably start by contacting a few parliamentarians in the SSHC commission.

Thoughts?

 

[tobiahjude99]

@ale4614 That would annoy the boomers. As the meager 1% we get is due to our money needing to finance their 6.X% conversion rates.

The boomers would smash this on a vote, as they royally fucked us over last Sunday already with the 13th ahv.

In case you havent noticed, Im very salty towards them. Any change that will benefit us young people will be voted against by them.

 

[shirel]

@tobiahjude99 We haven’t noticed at all

 

[virtualhope]

@ale4614 So basically double the 3a limit if don't want a 2nd pillar account?

I personally would like it (if the employee match will be kept), but the left will not like it at all. They like social solutions (1st pillar) and controllable solutions (to some degree 2nd pillar) much more than a free solution (3a). I therefore don't think that it would survive.

 

[ale4614]

@virtualhope The left doesnt like the 2nd pillar though, its a liberal/conservative construct. So they might be indifferent to this proposal. What is true though is that there will be no party fully in favour.

 

[virtualhope]

@ale4614 It's true that they don't really like it, but I would assume they like it more than the 3a (because it gives you guaranteed pensions and the citizen doesn't need to be bothered to know anything about investing).

 

[felicitypenny]

@ale4614 vested benefits account and most stocks you can get.

 

[resjudicata]

@ale4614 It's why I pulled my money out to pay down the mortgage and use my cash reserves instead...

 

[ale4614]

@resjudicata Smartest thing to do with that money in the current system.

 

[kentmcleod1]

@ale4614 I think what may have a better chance would be keeping pillar 2 providers similarly regulated, but allowing people to choose their provider freely. By better chance I mean 0.5% rather than 0%.

This would keep pillar 2 as a very stable safety net. But you know at least some providers would start to compete to offer a bit better capital return, and this competition would create some better deals for workers.

But I really don't see it happening. Lower paid jobs don't get much 2nd pillar. Old people benefit from the status quo. The number of people that would support such a move is just too small.

 

[soddygurl]

@ale4614 The magic words to drop with the parlamentarians are «Freie Pensionskassenwahl»

 

[genejack]

@ale4614 Just abandon the second pillar completely. Pension funds are just increasing the (already insane) housing prices by investing in properties. The best pension fund is owning a house or an apartment where you can live rent free. (Get rid of the "eigenmietwert" too)

 

[heal_the_sick]

@ale4614 The current 2a pillar system is nothing else than the current retierees stealing from younger people. The best thing you can do is take out as much money as you can either by buying property or changing jobs. There is nothing morally wrong at all with doing this.

 

[ale4614]

@heal_the_sick Agreed, but maybe it doesnt have to be this way.

 

[anniew]

@heal_the_sick How does changing jobs help?

 

[ale4614]

@anniew When you change jobs you should put the money from your old 2nd pillar to the new one, legally speaking. You can also not do that and park it in a vested benefits account, since the law is not really enforced. This way you can invest it more aggressively in stocks than a pension fund would

 

[anniew]

@ale4614 Damn, If only I knew one month ago

 

[danielincebu]

@ale4614 Go with viac on vested benefits put maximum in investment on stock markets. Way better than sending this to employer pension fund…

 

[ale4614]

@danielincebu Yes but thats not legal yet, respectively I want to send my current contributions to a vested benefits account, not the ones from a previous employer.

 

[orton776]

@ale4614 A more user-centric model is available in many eu countries, for example Estonia. Doesn't matter where you work, you control the 2nd pillar investments.

I personally support your idea fully as it would also clean up the mess when switching jobs, taking a sabbatical etc. As you don't need to move anything to the pension of a new company or to the holding account.

The only question is whether the insurance companies would let this happen...