3a & Vested Benefits: Account Solution

In Flash 57, we discussed that for vested benefits (VB) and the 3rd pillar, in addition to the securities-based and insurance solutions, the account solution is also an option. With the account solution, interest is credited to the account and — at least at first glance — no risk is involved. However, as shown in Flash 57, the account solution is not exactly "en vogue" and has particularly lost ground to the securities-based solution in recent years.

The Chart of the Week also makes it easy to identify the reasons for this development: the green hatched area signals the range of interest rates offered on the market for 3a account solutions (minimum to maximum), while the green dashed line shows the average interest rate. Over the past 10 years, 3a account holders have earned little more than a nominal zero return.

When you also factor in that one franc in 2025 can no longer buy the same amount of goods as in 2016 due to inflation, it becomes clear: a 3a account solution has actually been a loss-making proposition in real terms — i.e. measured in purchasing power. Over the 10-year period, the total interest accumulated in a 3a account averaged around 2.6%. Over the same period, however, money lost approximately 7.3% of its purchasing power.

The situation looks similarly bleak for account solutions in the vested benefits space. If you transferred your vested benefits balance to the Stiftung Auffangeinrichtung in 2016, you would have received the interest rates shown as the blue dashed line in the Chart of the Week. Cumulated over the entire decade, this amounts to interest of around 1.3%. At some individual providers on the market, you may have received slightly more interest, but in inflation-adjusted terms, account-based savings in the vested benefits space — just like in the 3rd pillar — have also been a loss-making proposition over the past ten years.

From a returns perspective, the account solution therefore cannot be recommended in good conscience in the current low- or zero-interest-rate environment.

But is the account solution at least "the place to be" for the risk-averse investor who is willing to accept a zero return out of fear of losses? In other words: can all risk be completely eliminated with a 3a or vested benefits account solution?

Unfortunately, not entirely. On one hand, we have shown that an account solution carries a considerable inflation risk. This risk can result in the 3a or vested benefits balance having less purchasing power at the time of withdrawal than at the time of the original contribution.

In addition, there is a bankruptcy risk: should the provider of the 3a or vested benefits account solution become insolvent, these balances are not protected — unlike private bank deposits, which are covered up to CHF 100,000 by the deposit guarantee scheme. In an extreme scenario, a total loss is therefore possible. It is therefore worth taking a look at the creditworthiness of the account provider. Vested benefits balances held at the Stiftung Auffangeinrichtung, however, are not affected by bankruptcy risk.