The Federal Council decided  to lower the BVG/LPP minimum interest rate to 1.00% effective
1 January 2017. This on ground of the low interest-rate environment and the weak stock market performance. The Federal Council was following the action recommended by the Federal Commission for Occupational Benefits on 2 September 2016.

The BVG/LPP survivor and disability pensions were not reviewed since they will not be adjusted for increases in the cost of living on 1 January 2017.

On the other hand, the BVG/LPP Guarantee Fund contribution rate for the subsidy for unfavourable age structure has been increased to 0.10% (formerly 0.08%). The contribution rate for insolvency benefits will remain unchanged at 0.005%.

The minimum AHV/AVS retirement pension will also remain unchanged in 2017 compared with the prior year. As a result, the ceiling for pillar 3a contributions is the same as last year:

CHF 6,768 for persons who are members of a pension fund, or

20% of net earnings up to a ceiling of CHF 33,840 for persons who are not members of a pension fund.

For contributions to tied pension assets (pillar 3a), given the relatively long time horizon until disbursement, it might be worthwhile to opt for a securities-based solution instead of a conventional account solution.

In that case, it is advisable to spread individual payments over the calendar year: not only does this smoothe your budget by avoiding a large single payment, staggered payments enable you to average out the price, since the chosen securities will be bought at different times. Over time, this will have a leverage effect, whereby the accumulated value will be higher than if the investment had been made in a single transaction following a single payment.

Thanks to its comprehensive offer, Liberty Foundation for 3a Retirement Savings has the ideal solution for every investment need, with particular regard to solutions involving several funds.

For more information, contact your personal consultant or Liberty's specialists.