Heinrich Bruhin, Head of Private Clients Pension at Tellco AG, is convinced: “Saving with the pillar 3a is simple and has substantial benefits for everybody.” In this interview, he reveals simple tips for financial security.
While there is a lot of talk about private retirement planning, the numbers paint a different picture: Only 60 percent of Swiss use the pillar 3a for retirement saving. Could it be that the pillar 3a is not actually that important?
Heinrich Bruhin: I think that to conclude that would be somewhat short-sighted. I see three reasons: Firstly, not all households have money left at the end of the month that they can invest in the pillar 3a. Inflation and rising health insurance premiums has put many families in a tight financial situation. Secondly, our Swiss social security system enjoys a high level of trust among residents. People assume that somehow, they will always have enough. Thirdly, I have the impression that we have a ways to go in terms of clarification: Private retirement saving, and the opportunities it provides, are still not widely understood. Someone who is not knowledgeable of a subject is likely to shy away from it. But in fact, it is not very complicated at all – there are actually profitable solutions for everyone.
So you want to convince everyone to use the pillar 3a?
For most people, it is a good move, yes. I often hear customers who have only just begun saving with the pillar 3a say “If I had only known how simple and flexible it is, I would not have put it off for so long.” That points to a lack of understanding. People have the impression that the pillar 3a is rigid and that you can only make large payments into it, which then cannot be used again. But in reality, banks offer fantastic solutions: You open an account, pay in as much money as you can and want to each year, invest the money profitably, and also benefit from the tax deductions every year. If you do end up needing the money before you retire, it is possible to withdraw it early – to finance a home used as a primary residence, if you become self-employed, or if you leave Switzerland.
So saving with the pillar 3a is easier and more flexible than most people think. But are private retirement savings even necessary?
We estimate that already today, around 30 percent of Swiss have gaps in their retirement plan. That means they do not have the financial security of knowing that they will be able to maintain their current standard of living after they retire. At the same time, retirement offers the time needed to focus on hobbies or to travel. Gaps in retirement plans happen quickly, often without the affected person even knowing it. Our lives tend to be less straightforward than we may like to imagine. You may study long and start a career late, spend time on continuing education, start a family, take time off, work part-time, or become self-employed. These and similar developments can create gaps in your retirement plan. The pillar 3a provides an ideal tool to help you avoid these gaps. If you regularly pay even small amounts of money into it, you can end up saving a substantial amount of money. I would particularly recommend to young people that they make a habit of regular saving as early as possible.
Is it not enough to just put aside some money in a savings account?
Having a savings account is definitely not a bad move. Interest rates for savers have gotten better again. But banks are sparing and slow when it comes to passing on the better interest conditions to their customers. Tellco is taking a different path. We offer our customers a fair interest rate, and aim to be among the top five in terms of interest offered. It is also important to us that our customers always have complete transparency when it comes to the returns they can expect, the risks involved, and especially the ongoing costs. The broad selection of investment solutions, with more than 50 different investment funds, rounds off our offer. To get back to your question: Someone looking to build up a fortune does not count on savings account interest, but uses profitable investment vehicles. These are particularly lucrative over longer investment terms. Securities investments in the pillar 3a are especially well-suited to long-term wealth building.
What should I pay attention to when choosing a pillar 3a retirement saving solution?
Of course, I am convinced that we at Tellco have the best offer on the market: attractive interest rates, interesting investment solutions, full transparency, and a digital solution. You can open a pillar 3a with us in a couple of minutes.
Generally, I recommend that you pay attention to these aspects when choosing a solution for your pillar 3a:
Do you have any other tips for saving with the pillar 3a?
I have three more interesting tips to pass on:
About the company
Tellco AG – a bank that is specialized in retirement planning
Founded in 2002, Tellco AG specializes in occupational and private retirement planning. Its offers span financial services in the fields of asset management, banking, private banking, and real estate. Tellco is one of the leading service providers in wealth and retirement management, with 9 billion francs of assets under management. Headquartered in Schwyz with offices in Zurich, Lausanne, and Rheinfelden, Tellco offers comprehensive financial services for companies and individuals.
About the offer
These are some of the services offered by Tellco:
About Heinrich Bruhin
Heinrich Bruhin is Head of Private Clients Pension at Tellco AG. He has more than 20 years of experience in the private banking sector. With his extensive experience, he takes a holistic approach to customers which encompasses retirement planning, wealth building, and financial planning.
Photograph: Nora dal Cero
