2nd pillar interest increase in 2025 - does it make sense to voluntarily add money?

O

OxygeN

Active member
Hi.
My SO's 2nd pillar will have 7.5% interest in 2025. Aged 45, do you think it might make sense to add some money voluntarily to the 2nd pillar in 2025? Would that money as well profit from the 7.5% interest rate? If yes, only if the additional money is added at the beginning of 2025, or this doesn't matter?

TIA
 
I guess you mean in 2024? Or the returns from 2024, given back in 2025. That's a very nice result. Keep in mind that the returns of the assets is not necessarily what you get back as a second pillar user.

I don't think you can contribute now to get the 7.5% returns, this would be too easy. Interest is likely computed on a daily basis, so if you invest now, you will only get interest for the last few weeks of December.

As to whether you should invest, it depends on multiple factors

thepoorswiss.com

Should You Contribute To Your Second Pillar In 2024? - The Poor Swiss

Should you contribute to your second pillar? Find out the advantages and disadvantages of investing into your second pillar with several scenarios.
thepoorswiss.com thepoorswiss.com
 
I'm talking about this sentence:
"[...] hat beschlossen, die Altersguthaben für 2025 mit einem Zinssatz von 7.5% zu verzinsen."
How do you understand this?
 
Baptiste Wicht said:
That sounds like your SO is very lucky and is getting an incredible interest rate on her second pillar :)
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:cool: So am I right understanding that the interest rate 7.5% is for 2025? So everything that will be in the second pillar for the whole 2025 will be getting 7.5% interest on top by 2026?
 
That's not how I think it would work. I would interpret it that way: Everything that has been in the pension fund for the entire 2024 will get the 7.5% rate (paid out in 2025). They cannot yet make promises for 2025 returns (paid in 2026). At least, that's how my pension fund is working.
 
Baptiste Wicht said:
That's not how I think it would work. I would interpret it that way: Everything that has been in the pension fund for the entire 2024 will get the 7.5% rate (paid out in 2025). They cannot yet make promises for 2025 returns (paid in 2026). At least, that's how my pension fund is working.
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I'll ask to find out and report back ;-) Thanks!
 
Hi.
This is what we got as reply:

"Ihr Guthaben bei der Pensionskasse wird mit 7.5% verzinst.
Beispiel: Guthaben in PK CHF 10'000.-, Zins per 31.12.2025 CHF 750.-"

So in fact this is their promise to pay 7.5% interest (in 2026) for the 2nd pillar capital from 2025.
 
Hi

I still find it weird (very different from my pension fund), but in this case, it does make a better case for a contribution. According to their answer, money added in 2025 should profit from that.
Keep in mind that the money will be blocked for 20 years and following years may not be as good, but at least you will get an excellent guaranteed year.
 
OxygeN said:
So in fact this is their promise to pay 7.5% interest (in 2026) for the 2nd pillar capital from 2025.
Click to expand...
Also interesting: my Pensionskasse let me know in December 2024 that they will pay 3% interest for 2024. This message came out of the blue. According to their website (going back till 2008) there has never been so high interest. There is no statement or committment for interest in 2025. I am only informed that the law requires a minimal interest of 1.25% in 2025.
 
gaijin said:
Also interesting: my Pensionskasse let me know in December 2024 that they will pay 3% interest for 2024. This message came out of the blue. According to their website (going back till 2008) there has never been so high interest. There is no statement or committment for interest in 2025.
Click to expand...
Mine also works like this.
 
OxygeN said:
Hi.
This is what we got as reply:

"Ihr Guthaben bei der Pensionskasse wird mit 7.5% verzinst.
Beispiel: Guthaben in PK CHF 10'000.-, Zins per 31.12.2025 CHF 750.-"

So in fact this is their promise to pay 7.5% interest (in 2026) for the 2nd pillar capital from 2025.
Click to expand...
I would expect this unusual (or does this pension fund always do so?) situation to have some reasons. For instance, as my pension fund reduced the conversion rate, they provided a compensation payment spread over three years.
 
I got 2,5% for 2024 .... after many years of blody Mndestverzinsung ... 7,5% for 2024 is be spectacular, congrats! 7,5% prefixed for 2025 would be insane ... what they do, if we experieence a market crash this year?
 
The NZZ has pension funds as its headline story today.

Short summary:
  • Most pension funds had a fantastic performance in 2024.
  • In general, pension funds of private companies give higher interest rates than pension funds of government.
  • Higher interest for active employees reduces the redistribution (Umlagerung) from active employees to retirees.
 
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