Retrospective: Friends of Funds on the topic of pension funds in retirement provision

Last week, a Friends of Funds panel discussion on the topic of ‘Collective investments in the service of financial retirement provision’ took place in Zurich under the moderation of Armin Jacobi (Managing Director of Averroes Concept Lounge GmbH). These were the key messages of the high-level, multi-faceted and lively debate:

For Switzerland and, to a certain extent, also for the EU, it was found that the legal requirements do not result in any loss of returns and do not have a noticeable impact on asset allocation.

The various vehicles, such as BVV2, have a remarkable spread of returns. The risk/reward structure is quite varied, partly because of the different liquidity requirements. The overall costs of administration and fiduciary management were considered to be rather high, which is due to the legal requirements among other factors.

The discussions also centred on the experiences of other EU countries, in particular Sweden, and their multiple adaptations of the legal provisions (three-pillar system and the respective requirements).

More in relation to Switzerland and BVV2, the trend has been for active investment decisions (I buy a share, a commodity) to take a back seat in recent decades, while passive investments (i.e. the purchase of certain funds) have increasingly come to the fore.