For 2017 the interest earned on the savings capital amounts to
- 2 percent on mandatory BVG assets (1 percentage point above the minimum interest rate),
- 2.5 percent on super-mandatory assets.
The attractive interest earned is the result of the innovative pension planning model that the Vita Joint Foundation introduced in 2014. Under this model, interest reserves are formed with returns on assets, as long as the target coverage ratio of 106 percent is achieved. From these reserves the Vita Joint Foundation then pays out additional interest to the insured over a period of five years. Over the years – and even in times that are unfavorable for investment – this leads to more balanced interest earned on retirement assets. In 2017 customers who helped build interest reserves in the past with their pension assets benefit from an additional percentage point of interest on their mandatory BVG assets. Customers who joined the pension fund in 2016 receive the base interest of 1 percent on the mandatory BVG assets and of 1,5 percent on super-mandatory assets.
Coverage ratio holding well in a low-interest environment
Despite negative interest rates and the generally unsatisfactory development of stock markets, the coverage ratio of the Vita Joint Foundation has held comparatively well. On 31 October 2016 it amounted to 104.6 percent (106.5 percent in the previous year)
This is made possible by the high structural risk capacity and the broadly diversified investment strategies of the Vita Joint Foundation. So far this year the foundation and its insured have primarily benefited from the pleasing performance of bonds and real estate.