What role do administrative costs play in occupational pensions?

What exactly are administrative costs?

Various costs are incurred in occupational pensions. It is helpful to distinguish between two main types:

• Administrative costs: These are the costs incurred for the operation of the pension fund. They include expenses for personnel and payroll administration, accounting, IT infrastructure, and communication with insured persons and affiliated companies. They cover the entire organisational effort.
• Asset management costs: These costs arise from investing the pension capital in the financial markets. They include fees for banks, fund managers, and other financial experts who ensure that your retirement savings are invested securely and profitably.

An efficient pension fund is characterised by low and transparent costs in both areas.

The direct impact on your retirement savings: A calculation example

Every franc spent on administration is no longer available for the interest on your retirement savings. Even though these are often small percentages, the long-term effect is significant.

Lean and cost-efficient administration therefore ensures that a maximum portion of your contributions is working for your future.

Transparency is key

Pension funds in Switzerland are legally required to disclose their administrative costs transparently. This transparency gives you the assurance that your pension assets are being used responsibly. You do not need to be an expert to find the crucial information.

How to check your pension fund's costs

Whether you are an employer responsible for your employees or an insured person planning your own future, a close examination of the cost structure is always worthwhile. Follow these three steps:

1. Get your insurance certificate: Look for terms like "administrative costs" or "administration expenses" on your annual insurance certificate. This is where you will find the specific figures for your situation.
2. Assess the costs: Compare the reported costs. Typical administrative costs in Switzerland often range from 0.2% to over 0.6% of pension assets. If anything is unclear, ask your pension fund directly for a detailed breakdown.
3. Look for efficiency: Check if your pension fund offers modern, digital processes. Efficient online platforms for employers (such as iTellco) and insured persons (such as ePlix) are often an indicator of lean and cost-effective operations.

At Tellco pk, we rely on a lean organisation and digital solutions to keep administrative costs as low as possible – so that more is left for your pension.

Do you have questions about the costs of your current pension solution or would you like a non-binding analysis? Our experts are happy to help. Simply contact us.