Key Words

Here are a few key words (in alphabetical order) to help you better understand the terms and expressions used:

Accident insurance

Compulsory accident insurance protects employees and employers against the costs arising from occupational and non-occupational accidents and illnesses. The foundation of this insurance is the Swiss Federal Accident Insurance Act (UVG) and its Ordinances.

Active management

The aim of active management is to achieve performance exceeding the reference target index (-> benchmark). This in turn presupposes that the portfolio composition (-> asset allocation) deviates from the agreed benchmark index. For that reason, active portfolio management focuses on risk-adjusted active returns, understood as the difference between risk-adjusted portfolio and benchmark returns.

Adjustment to price trends

Cost-of-living provisions for compulsory survivors' and disability pensions (obligatory under the FSOPP) are foreseen under certain conditions as part of statutory minimum benefits. Cost-of-living adjustments to retirement pensions are guided by the financial options available to a pension fund.

Age

is calculated as follows: calendar year minus year of birth
Example: calendar year 2016 minus year of birth 1976 = age 40

AHV

Swiss Federal Old Age and Survivors' Insurance. AHV, along with disability insurance (IV) and supplementary benefits (EL), forms the foundation of state social insurance in Switzerland ("Pillar 1").

Alpha factor

In financial market theory, the alpha factor (α) measures the risk-adjusted outperformance (positive alpha) or underperformance (negative alpha) of an investment in comparison to a reference value (->benchmark). The alpha factor thus corresponds to the portion of the return that is independent from the market return. The alpha factor is a commonly used parameter for assessing active managers.

Alternative assets (non-traditional assets) 

Investment options that feature different behaviour in terms of return and risk characteristics when compared to traditional asset classes such as shares, bonds and money market investments. Examples: commodities, private equity and hedge funds.

ALV

Unemployment insurance

Asset allocation

In asset allocation, the total assets are divided into individual asset classes (eg liquidity, bonds, etc).

Asset liability management

Configuration of a portfolio by asset class (shares, bonds, money market products, real estate, mortgages, etc) and by country, industry and currency. Asset allocation is guided by the risk capacity of a pension fund and by the target returns that must be generated.

Auditors

Persons responsible for auditing the annual financial statements. The FSOPP requires the appointment of a professionally qualified auditor. This is mandatory for all pension funds.

Autonomous pension fund

A pension fund that bears all pension risks itself, ie not only investment and longevity risks in the context of retirement provision, but also insurance of the risks death and disability. The Pension Fund Swiss Re is an autonomous pension fund.

Average annual return

The average annual value change of an asset expressed as a percentage can be explained using the following example:
The performance of a portfolio over a period of three years is as follows: 1st year: +5%; 2nd year: -3%; 3rd year: +11%. The cumulative return over the full period is as follows: (1 + 0.05) x (1 - 0.03) x (1 + 0.11) - 1 = 0.1305 = 13.05%.
The average annual return is finally calculated using the applicable root of the cumulative return (cube root of 1.1305 = 4.17%).

Average invested capital

The average invested capital during a given period corresponds to the starting capital plus the time-weighted (day-weighted) capital flows during the relevant time period.

Basis points

A basis point corresponds to 0.01%. Mandate fees, as well as yield differences (eg credit spreads) between various bonds, are often expressed in terms of basis points.

Benchmark

Parameter used to measure the performance of an asset, asset class or portfolio. A benchmark is also referred to as a reference value, reference index, comparative index or the market. Some examples of benchmarks are bond and share indices that provide key figures for the price developments affecting bonds and shares on a stock exchange.

Beneficiaries

persons who, in case you die, are entitled to receive benefits.

Bridging pension

Temporary pension that is (or may be) granted between the time of retirement and commencement of the AHV pension, in accordance with the Regulations.

Buy-in

Voluntary, additional contribution made by an insured person to the supplementary financing of any contribution gaps with the aim of obtaining the full scope of regulatory benefits provided by the person's pension fund (within the framework of certain legal limits or "buy-in restrictions").

Buy-in amount

The amount of the buy-in payments used to cover any pension gaps that arise through salary increases and missing insurance years.

BSV

Swiss Federal Social Insurance Office

FOPP

Swiss Federal Act on Occupational Retirement, Survivors' and Disability Pension Plans. In force since 1 January 1985. This Act governs statutory minimum benefits.

BVV2

Ordinance 2 on Occupational Retirement, Survivors' and Disability Pension Plans (FSOPP implementing provisions).

BVV3

Ordinance 3 on Occupational Retirement, Survivors' and Disability Pension Plans (governs fixed private pension schemes, "Pillar 3a").

Capital for death

capital sum that your beneficiaries receive from the Capital Plan if you die.

Capital for disability

capital sum that you receive from the Capital Plan if you are recognised as unfit for work.

Capital Plan

Your contributory salary is ensured in the Capital Plan. The employer contributes 10% of the contributory salary to the Capital Plan, and the employee can make voluntary contributions to the extent that there is buy-in potential. The capital in the Capital Plan is invested in a mutual fund. In the event of grounds for payment, the insured receives at least the savings capital subject to interest or the value of the fund units, whichever is higher. Savings capital in the Capital Plan is paid out only in cash. It cannot be converted into a pension.

Cash value

Amount of money corresponding to the (discounted) value of future benefits or contributions at a given point in time.

Certificate of inheritance

Official confirmation of inheritance and heirs.

Child's pension

annual amount paid to you from the Pension Plan for every child under 18 / 25 * if you become unfit for work.

(* Until 25 if the child is still studying or considered unfit for work. Children for whom you have provided substantial economic support are entitled to the same benefits as your own children. The plan pays a child's pension for up to a maximum of three eligible children.)

Collective foundation

Occupational pension institution that can be joined by various companies (mostly of smaller size) if such companies do not wish to set up their own foundation for administrative or cost-related reasons. This consists of financially independent pension schemes with their own funding ratios, encompassing one or more companies.

Contributions
Annual amount expressed as a percentage of your insured salary. A distinction is made between risk contributions, contributions towards the financing of a supplementary pension and retirement credits. Risk contributions (4% of the insured salary) and any contribution towards the financing of a supplementary pension (1% of the insured salary) according to the transitional provisions, or on retirement at the request of an affiliated company, are paid 100% by the employer. The amount of the retirement credit contributions depends on the contribution category selected by the insured; the employer's contribution is always 18.5% of the insured salary.

Contribution category

You can choose one of the following contribution categories:
Category 1 9.5% of insured salary
Category 2 4.8% of insured salary
Category 3 0.0% of insured salary

Contributory salary

salary on which contributions to the Capital Plan are based. Your contributory salary equals the bonus amount you actually receive from Swiss Re, excluding the uplift if your bonus is paid in bonus is paid in bonus shares instead of cash.

Coordination amount

part of your salary that is deducted from your pensionable salary, since it is covered by federal insurance (AHV). The degree of occupation applies to the coordination amount.

Conversion rate

A (minimum) percentage rate defined in the Regulations or stipulated by the Federal Council for the calculation of annual pensions on the basis of the existing pension capital. This is used in funds with defined-contribution schemes.

Coordination deduction

The amount deducted from the applicable salary to determine the coordinated salary. The FSOPP coordination deduction is seven-eighths of the maximum AHV retirement pension.

Currency hedging

Over time, exchange rates are subject to fluctuations. Therefore, the price fluctuations of investments in foreign currency assets are higher than those of comparable investments in Swiss francs. To offset this added risk, a hedging transaction (currency hedge) can be effected.

Currency overlay management

A hedging system for foreign currency risks based on systematic decision-making criteria. This concept is founded on option-price theory; based on the predefined trade rules and with the help of forward exchange transactions, a hedging strategy is developed for the currency represented in the portfolio, thereby limiting the risk of currency losses while leaving open opportunities for currency gains.

Defined-contribution scheme

According to the concept of the defined-contribution scheme, the amount of contributions is determined on a statutory basis by a defined reference value (eg insured salary) and this is used to calculate the amount of the resulting benefits.

Degree of occupation

is fixed by your employment contract with the affiliated company.

Direct asset management costs

Costs that are invoiced directly by an asset manager.

Disability

The Pension Plan and Capital Plan each define disability in a different way. Under the Pension Plan, you are considered disabled when the Pension Fund Board recognises you as such. Under the Capital Plan, you are considered disabled when, in addition to the above, you receive a full state disability pension (IV) and you haven't reached your age of 65.

Disability pension (limited-term)
The annual amount that you are paid from the Pension Plan if you have been recognised as fully or partially disabled by Federal Disability Insurance (IV). A disability pension is paid only until the age of 65 at most. At that point in time, it is replaced by the retirement pension, based on the option selected with regard to survivors' benefits, the applicable conversion rate valid at that time and your capital in the Pension Plan.

Discounted cash flow method (DCF)

With the discounted cash flow method (DCF), the current market value of a property is determined based on the total net proceeds to be expected in the future, discounted to the reference date. The net proceeds are discounted in a market-oriented and risk-adjusted manner, individually for each property, depending on the specific opportunities and risks involved.

Diversification

Division of the investment amount into various asset classes and/or investment markets. Modern financial market theory and practical experience have shown that diversification contributes to reduced investment risks. Within an equity market, diversification allows for the reduction of security-specific risks and makes it possible, in the case of sufficiently broad diversification, to bear only the overall risk in the market. Investment risk can be further reduced through international investment diversification.

Duration

The average capital commitment of a fixed-income investment (eg bond, loan) or a portfolio of fixed-income investments is measured in years and referred to as the ("Macaulay") duration. Influencing factors in this case include the residual maturity and coupon payments, which reduce the duration. The duration is also a measurement of interest rate risk, with the (unit-free) "modified" duration primarily being used here. For (small) interest-rate changes, with a modified duration of x and an interest-rate increase of 1%, the value of the investment falls by x%.

EDI

Swiss Federal Department of Home Affairs

EL

Swiss Federal Act on Supplementary Benefits (supplementary to AHV/IV)

Emerging markets

This refers to equity markets in emerging countries in Latin America, south-east Asia and eastern Europe. Many of these markets are considered to have special growth potential, but they also feature a higher price risk.

Employer foundation

Employer foundations ("welfare funds") are pension funds whose assets are formed solely through employer contributions or the company's own investment income, not from contributions by beneficiaries. Benefits are typically provided on a voluntary basis, at the discretion of the pension fund board in particular hardship situations. No statutory entitlements apply in this context. The articles of association of an employer-run welfare fund also often feature a financing purpose, in that contribution payments to other pension funds of the founder company are provided for.

Employment disability

Medically confirmed inability to exercise a previous career or other reasonable professional activity.

Entry contribution

The amount that an insured person must contribute on entry into the pension fund so as to obtain the full scope of regulatory benefits (see also "Buy-in"). This corresponds to the amount that a person of the same age with identical salary development and a full contribution period could claim as a leaving benefit if that person were to leave the pension fund at the same time ("revolving-door principle").

Entry generation

The generation that was at least 25 years old, but had not yet reached retirement age, as of the entry into force of the FSOPP on 1 January 1985.

EO

Swiss Federal Income Replacement Scheme (compensation for military service)

ER account
Using the ER account, an insured can make voluntary contributions to pre-finance early retirement and thus increase the retirement pension and/or pre-finance a supplementary pension. The ER account is fed not by monthly contributions, but solely by voluntary deposits.

Exemption from contributions
An exemption from contributions applies for both the employee and employer contributions throughout the period of continued salary payment and in the case of disability recognised by Federal Disability Insurance (IV). During the period of continued salary payment and disability benefits payment, the Pension Fund Swiss Re pays the contributions (retirement credits) so as to accrue retirement savings capital based on the insured salary before the disability and on the last contribution category selected by the insured.

Feasibility declaration

For a divorce (termination of a registered partnership being treated in the same way), a feasibility declaration must generally be submitted to the relevant court in addition to the divorce agreement. With the feasibility declaration, the pension fund confirms the amount of vested benefits as of the divorce date and the possibility (=feasibility) of a transfer to the spouse's or registered partner's pension fund.

Fluctuation reserve

This offsets the impairment of investments and provides operationally required equity capital. The fluctuation reserve must be accumulated in a risk-based manner.

Full insurance

As of 1 January following your 24th birthday, in addition to being insured against disability and death, you will also be insured for retirement and accumulate retirement savings capital.

Funding ratio

The funding ratio refers to the ratio between the assets effectively available and the pension assets required from an actuarial perspective. A funding ratio of less than 100% is referred to as a cover shortfall, and a funding ratio of over 100% as surplus cover.

In comparison to the actuarial funding ratio (official funding ratio), the economic funding ratio is lower, as in this case the capital underlying current pensions is calculated using a risk-free interest rate. This method tends to be better suited to the risk capacity of a pension fund.

FZG

Swiss Federal Act on Vested Benefits in Occupational Retirement, Survivors' and Disability Pension Plans ("Vested Benefits Act")

Global custodian (custodian bank)

Responsible for the global, central custody and technical management of assets. Financial management (portfolio management) is performed as independently as possible from the global custodian. The outstanding benefit of using a global custodian is having full information about an asset at all times.

Group insurance

Insurance contracts featuring collective coverage for a group of persons and premiums calculated according to uniform tariffs. The policyholder is generally a pension fund (also a collective foundation, for example).

Guarantee fund

Guarantees the benefits provided by pension funds in the event of their insolvency up to a legally defined maximum. It also pays contributions to pension funds whose insured pool features an unfavourable age structure.

Health insurance

Health insurance provides all persons living in Switzerland with access to good medical care and ensures medical treatment in the event of illness. The foundation of this insurance is the Swiss Federal Health Insurance Act (KVG) and its Ordinances.

Incapacity for work
For an insured to receive wage replacement benefits due to an incapacity for work, the incapacity must be of at least 20% and must be confirmed by a doctor.

For an insured to receive a full or partial temporary disability pension, Federal Disability Insurance (IV) must grant the insured a full or partial pension.

Insured salary

pensionable salary minus coordination amount. The insured salary is the basis used to calculate contributions in the Pension Plan and the benefits in case of disability and death.

Investment behaviour

The earnings- and risk-oriented management of a pension fund's assets in compliance with specific investment regulations. The highest governing body of the Pension Fund (Pension Fund Board) is responsible for managing asset investment (strategy, monitoring and controlling). It has delegated the monitoring and controlling of investment behaviour to the Investment Committee.

Investment foundation

The purpose of an investment foundation is to manage the assets of multiple pension funds in a secure and profitable manner within the framework of the legal investment regulations.

IV

Swiss Federal Disability Insurance (IV)

Joint management

Principle of numerically equal employee and employer representation in the highest governing body (pension fund board) of a registered pension fund.

Leaving benefit (or vested benefit)
Amount to be transferred when an insured leaves a pension fund. When you leave the Pension Fund Swiss Re, you receive a leaving benefit that consists of your retirement savings capital from the Pension Plan and the ER account, as well as your savings capital or the value of the fund units in the Capital Plan.

Limited-term disability pension

annual amount paid to you from the Pension Plan if you are recognised as disabled. The disability pension is paid out until you reach age 65, after which it will be replaced by the retirement pension.

Lump-sum death benefit

One-time (non-compulsory) benefit that a pension fund pays to entitled beneficiaries on the death of an insured, in accordance with the statutory order of beneficiaries. 

Lump-sum option / lump-sum withdrawal

Option of drawing pension benefits in lump-sum form to the extent allowed by the Regulations.

Mutual funds

Assets that are raised for collective capital investment through the public solicitation of private and institutional investors, and which are administered by a fund management company on behalf of investors according to the principle of risk diversification. Depending on the type of fund, the fund assets are invested in securities (bonds, shares, etc), money market instruments and/or real estate.

Non-compulsory component

Pension solutions that extend beyond the statutory minimum benefits under the Swiss Federal Act on Occupational Retirement, Survivors' and Disability Pension Plans (FSOPP). These are also referred to as "supplementary", "expanded", "extended" or "excess" pension provision.

Obligation to pay contributions

The obligation to pay contributions stipulated by the Regulations. A contribution generally refers to a recurrent monthly contribution.

Order of beneficiaries

The order of the potential beneficiaries of survivors' benefits in the context of non-compulsory pension coverage (in addition to spouses and orphans, also an insured person’s life partner, parents and siblings, for example).

Orphan's pension

annual amount paid by the Pension Plan to each of your children under 18 / 25 * if you die.
(* Until 25 if the child is still studying or considered unfit for work. Children for whom you have provided substantial economic support are entitled to the same benefits as your own children. The plan pays an orphan's pension for up to a maximum of three eligible children.)

Over-compensation reduction

Mechanism for coordinating occupational pension benefits with the benefits provided by other social insurers and pension providers.

Ownership rights

Shareholders assert their ownership rights at the general meeting of shareholders. They have a right to participate in the general meeting of shareholders, to obtain information and to vote. They are also entitled to receive a share of profit and to elect the board of directors.

Partial retirement

Partial withdrawal of retirement benefits with a corresponding reduction of the degree of employment before reaching the retirement age (eg from age 60) or in case of continuing employment beyond the retirement age (eg until age 70).

Partially autonomous pension fund

Pension fund that does not bear certain risks itself (eg death and disability) but has these "reinsured" by an insurance company.

Partner's pension

Non-compulsory survivors' benefits granted to the surviving partner of an insured person.

Pay-as-you-go system

System for the financing of ongoing benefits from contributions made in the same period (eg AHV/IV).

Pensionable salary

your pensionable salary corresponds to your salary.

Pension assets

This corresponds to the balance sheet total minus liabilities towards third parties.

Pension capital

This refers to the total pension capital of active insureds and pensioners, as well as the technical reserves.

Pension fund

An institution for occupational pension provision that pays ongoing benefits (pensions) for retirement, disability and death. The term is now used colloquially to refer to a pension institution in general.

Pension Fund Board

group of eight people who are responsible for the administration of the Pension Fund Swiss Re. Four members are designated by the affiliated companies and four persons are elected by the insured persons.

Pension insurance experts

Official title reserved by the Swiss Federal Office for Industry, Trade and Labour for persons whose training and professional qualifications satisfy the legal requirements of an (actuarial) expert for occupational pensions.

Pension Plan

Your salary is ensured in the Pension Plan. Both the employee and the employer make monthly contributions to the Pension Plan. In addition, voluntary contributions may be made within the scope of the existing buy-in potential. On retirement, the insured may choose freely between a lump-sum payment and a lifetime retirement pension. It is also possible to choose any desired mix of a lump sum and pension.

Pension value pay-as-you-go system

Method of structuring benefits financing according to the fully funded system. The financing is designed in such a way that the technical reserves can be kept available for all pensions payable in a given period.

Performance

Return on an investment taking into account distributed (and reinvested) income and value increases.

Private equity

Investments in (mostly unlisted) companies to promote their founding and/or growth, or to solve problems of succession and ownership.

Profit sharing
All contributions paid into the Capital Plan are invested in the UBS AST2 EA – Kapital Plus 2019 Fund. If the value of the savings capital invested in fund units is higher than the interest earned on the savings capital, the difference is paid out in the form of profit sharing.

Registered pension fund

Pension fund that is authorised to provide compulsory occupational pensions. On being entered in the applicable register maintained by the cantonal supervisory authorities, such a fund is obligated to satisfy all statutory (minimum) requirements under the FSOPP at all times.

Regulations

The regulations of a pension fund are issued by the highest governing body (pension fund board) and serve to define the content of the pension benefits relationship, ie the legal relationship between the pension fund and each individual beneficiary thereof. This is a standard form agreement, similar to general insurance conditions (GIC), providing a detailed description of the benefits and contributions applicable in the pension fund.

Reinsurance

This term refers to an arrangement whereby a (partially autonomous) pension fund covers all risks or specific risks through a collective insurance contract with an insurance company.

Residential property purchase incentive scheme (WEF)

Use of occupational pension funds to finance owner-occupied residential property (early withdrawal or pledging of pension benefits).

Retirement age

65 for women and men. The earliest possible retirement age is 58.

Retirement credits
(Savings) contributions for the accrual of retirement savings capital (retirement provision), expressed as percentages of the coordinated salary. In the Pension Fund Swiss Re, the employer contributions are of the same percentage for all insureds, regardless of their age, and amount to 18.5%. Employees have the option of choosing among the following savings contribution rates: 9.5%, 4.8%, 0%. The rate selected must be maintained for at least 12 months.

Retirement, early

The option provided for in the Regulations of receiving early (reduced) retirement benefits if the employment relationship is terminated within a certain time period before reaching the normal retirement age (eg from age 60).

Retirement pension (presumable)

annual amount paid out by the Pension Plan if you retire. Retirement savings capital multiplied by the year of birth dependend conversion rate at retirement age.

Retirement savings capital in the Capital Plan

One-time cash payment that a pension fund makes to an insured person at the time of the latter's retirement.

Risk benefits

Benefits in the event of disability and/or death.

Risk contribution

amount expressed in % of your insured salary used to finance the benefits paid out upon death or disability. Paid in full by the employer.

Risk insurance

as of 1 January following your 17th birthday, you will be insured for the risks of disability and death provided you earn an annual salary of at least CHF 21 330.

Salary, applicable

Entirety of all annual remuneration elements that must be taken into account for occupational pension planning.

Salary, coordinated

Portion of the applicable salary after deduction of the coordination amount.

Salary, insured

Salary portion relevant for pensions (potentially after deduction of the coordination amount), which in turn is limited by a legally stipulated maximum amount.

Salary subject to contributions

Portion of the applicable salary that forms the basis for calculating contributions.

Savings capital

amount that you have accumulated in your savings account that you receive when you stop working for the affiliated company. If the value of your fund units is greater than your savings capital (which includes interest) when your pension entitlement begins, you will receive the difference in the form of profit-sharing. Once you receive payment of your savings capital, your plan participation ends.

Securities lending

This refers to the lending of securities in return for payment, with the loaned securities being secured through deposited assets. The lender also participates in the property rights during the lending period.

Spouse

person to whom you are married according to the Swiss Civil Code (CC). The notion of "spouse" applies equally to men and women. 

Spouse's pension

annual amount paid from the Pension Plan to your surviving spouse if you die. 

Statutory auditor

Legal entity or individual assigned to undertake the annual auditing of accounts and business management (also sometimes referred to simply as the "auditor").

Stop-loss insurance

A type of reinsurance. The insurer's obligation to provide benefits is limited to loss amounts that exceed a predefined amount over a particular time period.

Substitute scheme

The FSOPP Substitute Occupational Benefit Institution is a pension fund active throughout Switzerland with specific legal responsibilities. It compulsorily insures employers who fail in their obligation to join a pension fund, and it acts as the compulsory occupational pension insurer of unemployed persons. It is also possible to voluntarily join the Substitute Occupational Benefit Institution, even for individuals not subject to any FSOPP compulsory insurance obligation. Finally, the Substitute Occupational Benefit Institution also functions as a vested benefits institution.

Supplementary pension
The annual amount that is paid to you on a temporary basis (until the start of your statutory AHV pension) from the Pension Plan provided that you retire early at the request of an affiliated company or take voluntary early retirement by the end of 2020 at the latest.

Support agreement

Agreement between life partners featuring a commitment to provide mutual assistance and support. The submission of such an agreement during the lifetime of an insured person is an important prerequisite for any entitlement to a statutory partner's pension in the event of the insured's death.

Swiss GAAP ARR 26

Designation for the Swiss financial reporting standards of the Swiss Accounting and Reporting Recommendations (Swiss GAAP ARR) for the application of Generally Accepted Accounting Principles (GAAP) by Swiss pension funds.

Tables

A table, also known as a mortality table, provides statistical mortality information. A distinction is made between periodic and generation tables. Periodic tables do not take into account future anticipated gains in life expectancy. Pension funds form reserves for this risk. Generation tables are calculated using a model that includes future anticipated gains in life expectancy. Each year of birth features a different life expectancy in this kind of table. Our experts therefore consider it a more reliable basis.

Target return

The return that pension assets should generate on an annual basis so that the pension fund can achieve or maintain its financial balance and can continue to meet its financial benefit obligations.

Technical interest rate

Interest rate for the discounting of future payments to a particular point in time. In a defined-benefit fund, this corresponds to the interest rate on the pension capital for active insureds and pensioners as incorporated in the tariff, with its level primarily being based on assumptions about the long-term returns that can be achieved on the capital markets.

Technical reserves

The pension capital of existing pensioners, calculated according to specific actuarial principles, which is needed to finance the benefits promised in the Regulations.

Three-pillar concept

In Switzerland, social insurance for retirement, disability and death is based on three pillars:

Pillar 1 represents basic state-run insurance (AHV/federal IV). All persons resident in Switzerland are insured under this scheme starting from age 17. In case of an insured event (retirement, disability or death), this state-run scheme provides basic benefits that are considered fundamental.

Pillar 2 encompasses occupational pension schemes. It supplements basic state-run insurance. Pillar 2 benefits are designed to be high enough that an insured's previous lifestyle can be more or less maintained following an insured event when these benefits are combined with state-run basic insurance benefits.

Pillar 3 refers to private pension provision, ie private savings. This supplements Pillar 1 and 2 insurance in accordance with personal preferences. In certain circumstances, private insurance contributions are tax-deductible (= fixed private insurance).

Total expense ratio (TER)

This refers to the percentage of a fund's annually incurred management and administration costs in proportion to its invested assets. It provides transparency for investors and enables cost comparisons. Multiplying the TER (in %) by the annual average of the assets invested in the collective investment gives the TER costs for this asset in CHF.

Vested benefit

Leaving benefit, ie total of the employer and employee contributions and buy-in amounts, including interest but not including risk contributions, which is transferred to the new pension fund when a person changes jobs.

Vested benefits account

Blocked account at the vested benefits foundation of a Swiss bank for the temporary maintenance of pension cover if (and as long as) no new employment is taken up with an employer in Switzerland. In the latter case, the assets must be paid into the new employer's pension fund in the form of an entry contribution.

Vested benefits foundation

Foundation at a bank with the purpose of investing and managing pension capital deposited as vested benefits in a tax-exempt manner and on favourable terms.

Vested benefits institution

Vested benefits institutions (bank foundations or insurance companies) are intended for the temporary management of the vested benefit capital of individual employees who cannot leave their leaving benefits in their old pension fund nor deposit them in a new pension fund (see also "Vested benefits account" / "Vested benefits policy").

Vested benefits policy

Fixed insurance policy with a Swiss life insurance company for the temporary maintenance of pension cover if (and as long as) no new employment is taken up with an employer in Switzerland.

Virtual calculation

Auxiliary calculation via the management of individual retirement accounts in accordance with the FSOPP standards to demonstrate that the minimum FSOPP requirements are complied with.

Waiver of contributions

Should you become disabled or your salary payments from the affiliated company cease, you and the employer are released from your obligation to pay contributions. While you are receiving disability benefits, the Pension Fund Swiss Re will pay the contributions (retirement credits) on your behalf in order to bolster your retirement savings capital. They will base their contributions on your insured salary before your disability and on the last contribution category you selected.

Widow(er)'s pension

Survivors' benefits for surviving spouses (subject to specific statutory conditions, such as minimum duration of the marriage).

ZGB

Swiss Civil Code