This is rarely the first question that comes to mind, but when having accumulated it over the years becomes significant, there is no doubt that capital security takes on considerable importance.
Beyond the solvency and solidity of financial institutions themselves, let's see the possible consequences in the event of an economic disaster, such as a potential bankruptcy of the institution that manages your assets or in the event of personal bankruptcy.
Lose your 3th Banking pillar
State bodies regularly monitor banking institutions and more specifically their own funds. In recent years, the proportion of equity has had to be increased and the risk of bankruptcy theoretically reduced.
In concrete terms, there is a bank guarantee of CHF 100,000 (formerly CHF 30,000), but within the limits of what a bank can repay. In other words, capital protection is not absolute and a good part of your 3th lost pillar. This is regulated by FINMA in its October 2018 fact sheet on bank deposit protection.
In the event of personal bankruptcy following unpaid lawsuits, for example, the debt collection office can seize your 3th banking pillar and therefore not only interrupt your savings process but also draw on it in order to repay your creditors.
The capital of a 3th banking pillar enters the estate in the event of the death of the holder. You should therefore be well informed so as not to lose a large part of the amount in inheritance tax and not to be in a hurry to receive the amount.
Lose your 3th Insurance pillar
The guarantee granted by insurance companies is quite different. All of the assets are guaranteed by a linked asset (asset that the company must own) accompanied by a margin required by the supervisory authorities. The OPP 3 (Occupational Benefits Ordinance) dictates the rules. The amount of the capital guarantee granted by insurance companies cannot therefore be lost.
In the event of the bankruptcy of an insurance company, contractual guarantees and capital are retained. In practice, they are managed by a new establishment which will assume the guarantees thanks to the assets in reserve of the former company.
In the event of personal bankruptcy, The 3th Pillar in insurance benefits from protection provided that specific conditions are respected. The policyholder, the insured person and the premium payer must be the same person and the beneficiaries are either the spouse or the children.
The 3th Pillar A is not included in the estate when it is insured. The tax is therefore light. Capital in the event of death can be added or increased as desired.
Lose your 3th Pillar on the market
For those who have chosen markets as a type of investment, there is the risk of a decrease in assets, at least temporary, and therefore of a partial loss in the event of selling the fund shares of the solution at that time.
Despite the strict investment rules imposed by the authorities, variations are not excluded and one should be aware of this type of risk. The main problem is the need for the amount when the markets are at their lowest or when they expire at retirement age.
Conclusion
The assets of the 3th pillars are generally very well protected by law. However, you must take into consideration the various risks and do not forget to diversify your accounts or 3.th pillars.
Many people asked themselves this question 30 years ago and now do not regret investing in a 3th pillar.
