Yesterday we became aware of Swiss Serenity through an advert. Swiss Serenity advertises a free search for lost pension fund assets. An honest intention, you might think. But Swiss Serenity suggests false facts. In this article, we would like to take a closer look at these.
This article has been translated from German
Contents
| Search free of charge, relocation expensive |
| Suggested: Complete search |
| Suggested: Search 1,500 pension schemes |
| Suggested: Co-operation with the federal government |
Search free of charge, relocation expensive
Swiss Serenity says that their search is free. That is correct. The search itself costs nothing. But it also costs nothing if you use the official online form of the 2nd Pillar Central Office to search for pension assets.
The interesting question now is how Swiss Serenity earns money when it offers its core service free of charge. The adverts it places cost a lot of money. The development of the platform, which is actually useless because there is already a free search service from the 2nd Pillar Central Office, also cost money. It is important to note that Swiss Serenity Service AG is not a non-profit organisation. It is a public limited company. So how does Swiss Serenity earn money? The answer is simple: through mediation. It brokers the pension fund assets found via the register of the 2nd Pillar Central Office to vested benefits institutions and receives a high commission of 3% in return, as you can see in the next chapter.
At first we thought that Swiss Serenity was only after the vested benefits assets lying around at the BVG Substitute Occupational Benefit Institution. At the end of 2023, this amounted to an impressive sum of over 18 billion Swiss francs, spread across around 1.5 million accounts. If Swiss Serenity could broker just 0.1% of these pension assets to a partner, it could already generate commission income of CHF 540,000.
But – as we found out later – Swiss Serenity wants more. By concluding the contract (in addition to the search order), you authorise Swiss Serenity to terminate all vested benefits accounts in your name and transfer them to Swiss Serenity’s partner, regardless of whether they are held with the BVG Substitute Occupational Benefit Institution or with another vested benefits foundation.
Swiss Serenity suggests: Complete search
Means in reality: Conclude contract / grant power of attorney
It is crucial for the financial success of Swiss Serenity that the highest possible proportion of the pension fund assets found can be placed with partners. This can be seen in the way Swiss Serenity proceeds.
Once you have completed the information required for Swiss Serenity to search for PF assets, you are asked in the login area, by email and with push messages on your smartphone to «confirm the automatic recovery of all recovered assets». This gives the impression that you can speed up the search by confirming: «To avoid having to wait long, you can finalise the search now.»
But when you click on the links to speed up the search or confirm the automatic recovery, it’s about something completely different. If you take a closer look, you’ll realise that it’s about two things:
- to open a vested benefits custody account with the Vested Benefits Foundation of Zugerberg Finanz; and
- to issue a power of attorney to transfer all vested benefits assets that are found to Zugerberg Finanz.
This is a little different than you would expect.
1. opening of a vested benefits custody account with the Zugerberg Vested Benefits Foundation
If you don’t click on the linked membership agreement on the page where you can conclude the contract, you will never have a complete picture of exactly what the Zugerberg Finanz product (in our case the Zugerberg Finanz FZR2) costs. That’s why we’re making up for it here:
- Total one-off costs: 3%
This is the brokerage compensation to Swiss Serenity.
- Total annual costs: 1.4675 %
This is made up of 1.25 % administration fee, 0.2 % portal fee and 0.21 % custody account fee from the bank.
An annual fee totalling 1.4675 % is very high when compared with leading vested benefits accounts and custody accounts such as VIAC, Frankly or finpension.
Swiss Serenity was not working with any other vested benefits foundations when we wrote this article, as we were able to find out on request.
2. authorisation to transfer all vested benefit assets to the Zugerberg Vested Benefits Foundation
By concluding the contract, you also grant Swiss Serenity Service AG a comprehensive power of attorney. This power of attorney includes
- «The cancellation and transfer of any credit balances from any vested benefits savings account / custody account.»
«The power of attorney is valid in all vested benefits foundations that manage my current and previous assets,» it continues.
In other words, if Swiss Serenity finds vested benefits assets that you are not missing via the enquiry with the 2nd Pillar Central Office, Swiss Serenity can also balance these accounts and transfer them to Zugerberg Finanz. We would not have expected this either.
Swiss Serenity suggests: Search 1,500 pension funds
Means in reality: Search at the 2nd Pillar Central Office
Swiss Serenity suggests a lot of effort. Swiss Serenity says that it conducts enquiries at over 1,500 pension funds in Switzerland in order to locate pension fund assets. In reality, however, it only makes one enquiry at the 2nd Pillar Central Office.
Long before Swiss Serenity, the Confederation had already set up a contact point for finding forgotten pension fund assets that are lying dormant somewhere in a vested benefits account – regardless of whether they are with a vested benefits foundation or the BVG Substitute Occupational Benefit Institution.
All pension funds in Switzerland must report annually to this contact point, officially known as the 2nd Pillar Central Office, all persons for whom BVG or vested benefits assets were held at the end of the year (see Art. 24a Vested Benefits Act).
It is therefore not necessary to enquire with over 1,500 pension funds. A query to the 2nd Pillar Central Office is sufficient. And the best thing is: you can also make such an enquiry very easily by completing, printing and sending the online form Search for occupational pension assets.
Incidentally, the LOB Guarantee Fund is responsible for maintaining and managing the register of the 2nd Pillar Central Office (see Art. 19a of the Vested Benefits Ordinance). This is the reason why the search function can be found on the LOB Guarantee Fund website.
What is the difference between the 2nd Pillar Central Office and the BVG Substitute Occupational Benefit Institution?
The 2nd Pillar Central Office must be distinguished from the BVG Substitute Occupational Benefit Institution. The BVG Substitute Occupational Benefit Institution has a different purpose. But we need to expand on this a little:
If you change jobs, you must inform your previous pension fund of your new employer. The previous pension fund will then transfer the assets to the new employer’s pension fund so that the pension scheme can be continued without any gaps.
However, if you do not have a new job, you must open an account yourself where you can temporarily park your pension fund assets. Such an account is called a vested benefits account. The account number of the vested benefits account must be communicated to the pension fund so that the assets can be paid out. But what happens if this information is not provided?
The BVG Substitute Occupational Benefit Institution was founded precisely for this purpose. It literally absorbs the assets that insured persons have left behind in their previous pension funds. In accordance with Article 4 of the Vested Benefits Act, the pension fund must transfer these assets to the Substitute Occupational Benefit Institution no later than two years after leaving the pension fund.
Important: The search function of the 2nd Pillar Central Office is not limited to vested benefits assets with the BVG Substitute Occupational Benefit Institution, but also includes all vested benefits foundations of banks and insurance companies.
Swiss Serenity suggests: Cooperation with the Confederation
Means in reality: Search at the BVG Central Office
Swiss Serenity’s promotional video suggests that there is cooperation with the Swiss Confederation. «We are working indirectly with the Swiss Confederation to recover them [the lost pension fund assets].»
This suggests that Swiss Serenity is cooperating with the federal government. This is not the case, as we were able to find out on enquiry with the Confederation. The federal government has not entered into any cooperation with Swiss Serenity:
«Neither the LOB Substitute Occupational Benefit Institution nor the LOB Guarantee Fund work together with Swiss Serenity,» it says.