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Many of you asked me about excellent vested benefits account. Until recently, I did not know any good one. But now, I came across Finpension Vested Benefits (previously known as valuepension)! Finpension Vested Benefits offers excellent vested benefits accounts.
Finpension Vested Benefits relies on index investing! They use low-cost index funds and allow people to invest heavily in stocks. Their vested benefits account looks like an excellent account that should maximize your return on the second pillar.
Their offer is really interesting. So I wanted to know more, even though I do not have a vested benefits account. They also have the best third pillar in Switzerland!
So, here is my complete review of the Finpension Vested Benefits offer.
|0.49% per year
|Up to 99%
|Maximum foreign exposure
|Maximum investment in cash
|Credit Suisse, Swisscanto and UBS
|English, French, German
Vested Benefits Account
Before we delve into Finpension Vested Benefits, we can cover vested benefits accounts in more detail.
Employed people are contributing to a second pillar. They cannot choose the second pillar account. Each company chooses a second pillar provider, and employees have to contribute.
But people who leave employment for some time must transfer their second pillar money into a vested benefits account. You can get a vested benefits account when:
- Taking a sabbatical
- Early retirement
- Leaving Switzerland
In this case, people are free to choose vested benefits accounts. So, they need a good one since their second pillar money could be there for a long time. Also, people with a vested benefits account can move to a new one.
If you want to learn more, read my article about vested benefits.
The problem is that there are many vested benefits accounts. And many of them are bad.
So, we will see what Finpension offers as a vested benefits account.
Finpension Vested Benefits
Finpension Vested Benefits is a foundation that is managed by finpension AG. They are offering vested benefits accounts in Switzerland. They are highly specialized in pension funds. Indeed, finpension is also managing finpension 1e (previously yourpension), providing second pillar accounts for high-income earners (the extra mandatory part of the second pillar).
finpension vested benefits was founded in 2017 under the name valuepension. In 2021, they rebranded their offer as Finpension Vested Benefits. Now, finpension is managing more than 1.3 billion CHF in assets.
The story of finpension is fascinating. Many clients at yourpension were delighted with their 1e pension plan. So once they left the company, they wanted to keep their second pillar invested similarly. So, finpension created the finpension vested benefits offer to help these people transfer to the vested benefits account they wanted.
There are two cases when you can use Finpension Vested Benefits. If you leave your job, you can transfer your second pillar to Finpension. If you already have a vested benefits account, you can switch it to Finpension. There is no minimum for getting started with Finpension Vested Benefits.
With Finpension, you will access your vested benefits account with the web portal. There is no application to install.
Finpension Vested Benefits is betting on digitalization to minimize costs. All their services are heavily digitized. However, it is essential to note that they are still available for support. So, you profit from the low cost of the solutions, but you can always contact them if you need assistance.
Since I had a few questions, I have talked with one person at finpension about their vested benefits offer. I had an excellent feeling about the company and its philosophy.
For more information about finpension AG, you can read my interview with CEO Beat Bühlmann.
Finpension Vested Benefits has a philosophy of low-cost and high returns. For this, they have found that the best course of action was to use index funds. That way, they can reduce fees and increase long-term returns. This philosophy is great because this is precisely my philosophy of investing.
So, at Finpension, your vested benefits portfolio would be a collection of index funds. They are offering several possible strategies already made. They range from very conservative with 0% stocks to high risk with 99%. The fact that they allow a substantial allocation to stocks is excellent.
It is essential to know that you can only go up to 99% if you have abother vested benefits account with less in stocks. Between your two vested benefits accounts, the total stock allocation must be 85% at least.
So, in practice, most people can only invest up to 85% in stocks. However, you can invest 85% in stocks and 14% in real estate if you want to be fully invested.
You may ask: Why index funds and not ETFs? It is a great question, and I asked them the same question. And it turns out that pension funds can invest in particular tranches of index funds in which the cost is significantly reduced. They have special conditions that private investors would not have. So by doing so, they are reducing costs and thus increasing our returns!
Another great thing about their vested benefits system is that they allow a very high level of customization in the portfolio. You can directly choose the index funds you want. And you can also change all the allocations. There are a few limits, of course. For instance, you need 1% cash and cannot have more than 50% in real estate. But overall, you have a lot of freedom for your portfolio. This freedom is great. But remember to keep it simple.
You can even change between
Finally, you can change your portfolio at any time. Finpension will apply the changes once a week (on the second banking day of the week).
It is also important to mention that Finpension has two vested benefits foundations. Therefore, you can open two accounts with them. Two accounts will allow you to split your vested benefits money in two when you stop working. You can save a lot on taxes when you withdraw that money.
Finpension Vested Benefits Fees
When you invest passively in index funds, fees are the most important. You need to minimize fees as much as possible. So, how much fees will you pay with Finpension Vested Benefits?
The great thing about Finpension is that they are transparent with their fees. They have an all-inclusive 0.49% fee. You will see this fee when you are customizing your portfolio. Since January 2023, this includes VAT, so you will only pay 0.49%! This fee is great.
One exception: Some of the funds they use are funds of funds. Finpension Vested Benefits cannot get zero costs for these funds. Therefore, there could be some extra fees depending on your portfolio. For instance, this is the case for their real estate funds. But there is good news: since you can choose your portfolio, you can also avoid these fees. It is possible to do a portfolio without extra fees; with this, you will pay exactly 0.53%.
There is no fee for rebalancing or investing in Finpension Vested Benefits. This absence of a rebalancing fee is excellent, of course.
Now, there are some fees for some operations:
- 400 CHF if you leave Finpension within one year of joining
- 200 CHF for pledging your portfolio
- 500 CHF for withdrawing the money to buy a house
- 500 CHF for withdrawing money while abroad
- 1500 CHF if you do it within one year of joining
Depending on your situation, you may never have to pay any of these fees. But for instance, 500 CHF for withdrawing the money for a house is a high fee. If you plan to buy a house soon, you may not want to move to Finpension. And the same thing stands if you plan to relocate abroad.
So, overall, the fees of Finpension Vested Benefits are outstanding. There are some cases where you will have to pay extra fees. But overall, it should not happen to most people. I wish the fee for withdrawing the money for a house would be less than 500 CHF.
Opening a vested benefits account at Finpension
We can also look at the process of opening a Finpension account.
Fortunately, it is straightforward to open an account. Just go to the Finpension Vested Benefits website. From there, you can click on Get Started, and they will take you through the entire process. You must find your risk ability, leading you to a portfolio. You can still change the portfolio later if you want.
After this, you will have to fill in the usual information. I do not think I have to guide you through that! Once you complete the form, they will message your phone to authenticate you. And Finpension will directly create your account. The entire process takes less than ten minutes and is entirely digital.
Once your account is created, they will give you one letter to order funds transfer from an existing second pillar. You can print, fill, and send this letter to Finpension Vested Benefits, and they will take care of the rest.
Overall, it is straightforward to open an account with Finpension. It is good that it is possible to open a digital account before getting the funds. That way, you can play with the portfolio and get familiarized with the interface before it is fully activated.
If you plan to invest any significant amount of money in Finpension, it is essential to look at security.
First, it is well regulated under Swiss Law. But this is the case with every vested benefits account. Something really good is that your assets are not in the hand of finpension (the mother company) but in the hands of the foundation. If finpension goes bankrupt, your assets are safe from bankruptcy. And then, the foundation will have the job of finding a new place for your assets. It may take some time, but you will recover your assets.
From a technical point of view, you will log in to your account with the web interface. It is important to note that the application is almost read-only. You cannot transfer money from the application. Even if someone could access your account, hackers could only mess with your portfolio, not with your money.
The web application is encrypted. And you will require a password to go with your account name. On top of that, there is an extra layer of security. Every time you log in, you will receive a code by SMS. It is a form of Two-Factor Authentication (2FA). It is a good enough security. I wish they would allow other forms of authentication (another 2FA system). But almost all the platforms in Switzerland are using SMS as two-factor authentication.
So, the security of Finpension Vested Benefits is excellent! Even though there is not much a hacker could do from your account, the app is well protected! Finpension has good security for your money.
Many people do not realize this, but security is essential for online finances. When much of your money is available from your computer, you must be very careful about your security.
It is always a good idea to compare services with other alternatives. There are few outstanding vested benefits accounts in Switzerland, but we can compare Finpension Vested Benefits with the VIAC Vested Benefits offer, which is quite interesting.
Finpension Vested Benefits vs VIAC
VIAC very recently introduced a vested benefits account. So, we can compare these two accounts. I will not go into too many details since I plan to make a complete comparison later.
For some people, there is one significant difference between the two offers: the domicile of the foundation. VIAC is in Basel, and Finpesion is in Schwytz. If you are retiring in Switzerland, this will not matter to you. But if you plan to leave Switzerland and withdraw your second pillar, it is essential. The difference is that when you withdraw money from your second pillar account, you will be taxed based on where your assets are managed (only if you leave Switzerland).
And it turns out that Schwytz is the best canton in Switzerland for taxes. They have the lowest second pillar withholding tax in Switzerland. If you work many years and have a large second pillar amount, this can account for more than 10’000 CHF saved (with about 300’000 CHF) compared to Basel. You can read this article to compare different withholding taxes.
From a price point of view, VIAC has a slight advantage. VIAC has a 0.46% total fee, while Finpension Vested Benefits has 0.49%. 0.03% is not a huge difference, but it is still a difference that could be interesting in the long term.
Finpension also offers slightly higher customization, and you can choose 99% of stocks (only 97% for VIAC). While 2% is a slight difference, in the long term, this 2% difference will significantly affect your returns.
Only Finpension offers two foundations. So, if you want to split your account in two to save on taxes, Finpension has a significant advantage.
If you invest in cash, VIAC will give you some interest (0.10%) back. But this is not the case with Finpension Vested Benefits. Now, these two providers are not for investing in cash. So this point should not matter anyway.
Finpension Vested Benefits offers a better deal than VIAC. For me, the extra 2% invested in stocks is significant enough. The extra customization is also nice. And if you plan to leave Switzerland, Finpension’s domicile may matter to you!
For more information, read my complete comparison of VIAC and Finpension vested benefits.
Is Finpension Vested Benefits safe?
Account balances are privileged up to 100'000 CHF. On top of that, securities are very well protected because they are separated from Finpension and the bank.
How many Finpension Vested Benefits accounts can I have?
You can have two Finpension Vested Benefits accounts. Indeed, Finpension has two different vested benefits foundation, allowing you to have two accounts.
When does Finpension invest my money?
Finpension invests available money on the second bank working day of each week.
How often does Finpension rebalance your assets?
Once a week, on the second banking day of the week.
What is Finpension Vested Benefits great for?
Finpension Vested Benefits is great if you want to invest your vested benefits. And it is especially great if you want to keep them invested long term.
What is Finpension Vested Benefits not great for?
Finpension Vested Benefits is not great if you are not going to keep your account for a long time. It is also not good if you do not want to invest your vested benefits.
Finpension Vested Benefits Summary
Finpension Vested Benefits is an excellent vested benefits account with optimized fees and the possibility for very aggressive investing.
Product Brand: Finpension
Finpension Vested Benefits Pros
Let's summarize the main advantages of Finpension Vested Benefits:
- You can invest up to 99% in stocks!
- You have very low fees.
- Finpension is using the best fiscal domicile for people withdrawing money abroad.
- Accounts can be opened very easily.
- Good customization of the portfolio.
- You can create two accounts!
Finpension Vested Benefits Cons
Let's summarize the main disadvantages of Finpension Vested Benefits:
- Not entirely straightforward to invest sustainably.
- No interest on cash.
Overall, Finpension Vested Benefits offers awesome vested benefits accounts. Finpension is the best vested benefits solution in Switzerland.
They have a significant investment philosophy based on passive investing. Finpension Vested Benefits is making everything possible to reduce costs. You can invest a significant amount in stocks and diversify your portfolio. On top of that, you have tremendous freedom to customize the portfolio.
I wish I had access to vested benefits accounts to invest with Finpension Vested Benefits instead of investing in my second pillar.
And here is excellent news for Switzerland: finpension also offers the best third pillar of Switzerland. Their third pillar uses the same philosophy as their vested benefits and 1e offer. And it comes with a mobile application and a web application. I think this is great to have more options for good third pillars.
If you open an account and use my code FEYKV5, you will receive 25 CHF in your account.
If you still have questions regarding Finpension, let me know in the comments below!
Do you have any experience with Finpension Vested Benefits? What do you think of their vested benefits offer?
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