Many residents of Switzerland use the pillar 3a to save for retirement and lower their tax bills. If you want to profit from the pillar 3a tax deduction in the coming year, you should make any contributions by mid-December.
Pillar 3a savings accounts are popular because they offer security, but the low interest rates mean you earn hardly any returns. As with regular savings accounts, money in pillar 3a savings accounts is held by banks, which pay interest for the use of your capital. Pillar 3a retirement funds typically yield much higher returns. Your money is invested in securities like stocks and bonds so that you can potentially earn higher returns. But how do pillar 3a retirement funds actually perform?
To find out, independent online comparison service moneyland.ch carried out a comprehensive performance analysis of 53 retirement funds. The study reveals the growth in the value of these retirement funds over the five-year period between September 30, 2020 and September 30, 2025. The analysis accounted for both fees charged by banks or asset managers, and the fees charged by the funds themselves (the total expense ratio). In addition to pillar 3a retirement funds, moneyland also studied the performance of pillar 3a savings accounts over the same period.
The moneyland.ch analysis included retirement funds from six major Swiss banks with countrywide branch offices. It also included the four biggest cantonal banks, and the two leading online pillar 3a asset management services. For each of these service providers, moneyland.ch analyzed all of the retirement funds in the biggest fund family (in terms of asset under management). Funds from certain other service providers were also accounted for in the evaluation so that the analysis would represent the bulk of the market.
These pillar 3a retirement funds had the best performance
The net performance accounts for all fees and charges. The Spectravest Fonds 3a from Quantex, which grew in value by 76.5 percent, is the clear winner. Second and third place are claimed by a fund from the Basellandschaftlichen Kantonalbank (BLKB) with 65.9-percent growth, and a fund from Postfinance with 50-percent growth.
The 10 retirement funds listed below had the highest net performance over the past five years. The performance figures account for both the fees charged by the service provider, and the fees charged by the fund itself.
The performance range across the 53 funds is broad. While the value of the best-performing retirement fund grew by 76.5 percent over the past five years, the worst-performing fund lost 5.4 percent of its value over the same period. The median net performance across all of the funds is 19 percent. “26 funds outperformed the 19-percent median, while another 26 funds had below-average performance,” explains Ralf Beyeler from moneyland.ch.
Stocks have performed better than bonds
The analysis shows that funds with large stock components performed much better than funds with smaller stock components. “The upper half of the performance comparison table is dominated by funds with a stock component of 65 percent of more,” expounds Ralf Beyeler from moneyland.ch. Of the 21 retirement funds with large stock components, 20 took leading positions in the performance comparison, with just one of them sitting in the mid-field.
A review of key stock indexes explains why funds that invest primarily in stocks have performed so well. Over the past five years, the Swiss Performance Index grew by nearly 30 percent, while the global stock index MSCI World gained by nearly 70 percent in Swiss francs.
Funds with large bond components, on the other hand, have performed poorly over the past five years. Of the 20 funds with the worst performance, 19 are funds in which bonds make up at least 45 percent of investments.
“Bonds have not been a profitable investment over the past five years, as the prices of bonds fell when the negative interest phase ended,” explains moneyland.ch analyst Felix Oeschger. The global bond market has shown weak growth, as seen in the performance of the Bloomberg Global Aggregate Bond Index. In terms of Swiss franc value, the index fell by around 20 percent over the past five years.
“If you are looking for high potential returns, there is no real alternative to investing in stocks and other tangible assets like real estate. The same thing also holds true for retirement funds,” says Felix Oeschger.
It is important to note that September 2020 – the start of the period used for the moneyland.ch evaluation – is shortly after the stock market crash induced by the coronavirus scare in the spring of 2020. The stock market has largely recovered in the meantime, in spite of further temporary setbacks such as supply chain interruptions, energy crises, and tariffs.
Investing in securities comes with a risk of loss
When saving for retirement, it is important to be aware that the possibility of earning higher returns comes at a cost in that there is a risk of losing money. Once your money is invested in securities, its value can fluctuate heavily – especially over shorter terms. “If you have a hard time coping with fluctuations and temporary losses, then it is probably better to stay away from retirement funds, and use pillar 3a savings accounts instead,” says moneyland.ch financial expert Ralf Beyeler.
If you still have many years to wait before you retire, and have no plans of making an early withdrawal, you can generally ignore fluctuations and simply wait for markets to recover. “If you leave your money invested for at least 10 years, the chance of making a loss is very small,” remarks Ralf Beyeler. Still, you should understand that losses can never be completely ruled out, regardless of the length of the investment term.
Banks with the highest interest for pillar 3a savings account balances
In addition to retirement funds, moneyland.ch also analyzed the performance of pillar 3a savings accounts from different banks. In this comparison, Crédit Agricole Next Bank takes first place, with a total return of 4 percent over the five-year term. Next in line are Cornèr Bank (3.8 percent) and the Hypo Vorarlberg Bank (3.7 percent).
Pillar 3a savings accounts provide a lot of security, says Felix Oeschger. “But returns and risk go hand in hand, so the potential returns are correspondingly small.” If you do not want to accept the risk of losing money, then pillar 3a savings accounts are a good solution for you.
Find more information in the guides and comparisons
There are huge variations between different pillar 3a solutions, as the moneyland.ch analysis shows. The interactive retirement fund comparison on moneyland.ch lets you compare funds against each other for other timeframes as well. In addition to pillar 3a funds, it is also worth looking at pillar 3a asset management services. You can find detailed information in the guide to pillar 3a asset management services.
If you use pillar 3a a savings accounts, then it is advisable to regularly compare interest rates using the pillar 3a account comparison.
Methodology
For the analysis, online comparison service moneyland.ch only accounted for funds and accounts that are offered within the pillar 3a.
Term used for comparisons: September 30, 2020 through to September 30, 2025.
Part 1: Pillar 3a retirement fund analysis
- The analysis accounted for the most important service providers, including six banks with countrywide branch offices (UBS, Raiffeisen, Postfinance, Migros Bank, Valiant, and Bank Cler), the four largest cantonal banks (Zürcher Kantonalbank, Basler Kantonalbank, Luzerner Kantonalbank, Banque Cantonale Vaudoise), and the two leading pillar 3a asset management services (Viac and Frankly). For each service provider, all funds in the fund family with the highest volume of assets under management were accounted for. Additional funds, including retirement funds from Quantex and the Basellandschaftlichen Kantonalbank, were also included in the analysis.
- The fees and charges accounted for in the analysis include:
- Fees charged by banks or asset managers for the safekeeping and administration of fund shares. These include possible flat fees, custody fees, and sales charges. Possible deferred sales charges were not accounted for in the analysis.
- Fees charged by the funds themselves that are deducted directly from the fund’s capital. These fees are collectively shown as the fund’s total expense ratio (TER).
- The net performance was calculated using data from service providers. It accounts for both fees and charges as well as fund fees (TER).
- Viac is the only service provider included in the comparison that does not operate its own retirement funds. Instead, it offers investment portfolios made up of a basket of index funds.
Part 2: Pilar 3a savings accounts analysis
- The account analysis accounts for six banks with countrywide branch offices (UBS, Raiffeisen, Postfinance, Migros Bank, Valiant, and Bank Cler), the largest cantonal bank (Zürcher Kantonalbank), and five banks with above-average interest rates (Crédit Agricole Next Bank, Cornèr Bank, Hypo Vorarlberg Bank, Bank CIC, Bank Wir).
- The interest yield was calculated for each month between October 2020 and September 2025, with calculations being based on the assumption that accumulated interest is credited to the pillar 3a account annually in December. The ongoing account fee of 36 francs per year charged by the Hypo Vorarlberg Bank is not accounted for in the comparison.
More on this topic:
Swiss retirement fund comparison
