Participants
> 400
Age
57% age 50+, 30% between 40 – 49, 13% between age 30 - 39
Satisfaction
84% are satisfied being insured in a 1e plan
Perception
Benefits outweigh concerns
The Swiss 1e pension plan market continues to evolve, with approximately 46,000 high-earning participants by the end of 2023 - a 13% increase from the previous year. With only ~9% of eligible individuals currently enrolled in a 1e plan, there is substantial room for growth.
In our 2024 extended study, we took a closer look at the insured members' perspectives, examining satisfaction levels, perceived advantages and concerns, as well as areas for improvement in 1e plans.
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Key findings from 1e insured members
More employee engagement leads to taking on more risk and aim for better retirement outcomes
- High satisfaction levels: 84% of participating insured members express satisfaction with being part of a 1e pension plan.
- Benefits outweigh concerns: Responses show a clear positive tilt, with 2.5 times more responses highlighting the benefits of 1e plans, compared to responses expressing concerns.
- Top improvement areas: Respondents highlighted three key areas for improvement – administrative costs/TER, solutions when leaving a 1e plan, and the functionality of online tools.
- Lower risk aversion: The majority of 1e members in the survey display less risk aversion compared to the average member's asset allocation in our 1e pension plan study. Assuming participating members are more engaged with the plan.
Research panel Participants split by gender, age and industry
Member statistics
Over 400 insured members participated in the 1e pension fund survey. With 88%, the majority of participants identify themselves as male.
Industry trends in offering 1e plans
The spread of industries offering 1e pension plans closely aligns with the company survey results. 1e plans are available across multiple sectors, particularly in Financial services, Manufacturing and Trade. Additionally, Professional services (including Legal and Consulting) are more prominently represented in the insured member survey compared to the company survey.
Key finding #1 Satisfaction of being insured in a 1e plan
Over 80% of members are satisfied being insured in a 1e plan
84% of participating insured members report being somewhat satisfied or very satisfied with being insured in a 1e pension plan. Only 5% expressed dissatisfaction or strong dissatisfaction. Interestingly, 6% of respondents were unable to answer the question, likely due to a lack of sufficient information, which may indicate that they are not fully aware of what a 1e pension plan entails.
Key finding #2 Benefits outweigh concerns of a 1e pension plan
More flexibility often comes with greater responsibility and risk
More than 80% of participating 1e members are satisfied with being insured in a 1e pension plan, reflecting a strong positive sentiment toward the flexibility these plans offer. This satisfaction is further underscored by the feedback received on the benefits versus concerns: 2.5 times more responses highlighted benefits compared to responses focusing on concerns.
The most cited benefit among 1e members is the ability to choose their own investment strategy (87%), with 63% also valuing the potential for higher investment returns. This indicates that members highly appreciate the flexibility and individuality that 1e pension plans provide.
However, with greater flexibility comes increased responsibility, and for 1e plans, this often translates into higher risks. The most frequently mentioned concern relating to the risk of 1e plans is the challenge of managing one’s own investment risk, cited by 21% of respondents, followed by concerns about the complexities of selecting an investment strategy (18%).
It's notable that 17% of members indicated they lacked sufficient information to answer these questions, which may point to an information gap.
Another key concern raised by members is the challenge of exiting a 1e pension plan, particularly when changing employers.
Although the issue of leaving a 1e pension plan was highlighted multiple times, legislative adjustments are anticipated that would allow members who join a company without a 1e plan to keep their pension assets on a vested benefits account for up to two years. In September 2024, Parliament agreed to this measure, and the Federal Council has submitted the proposed legislative changes for consultation, which will continue until the end of January 2025.
Interestingly, the lack of a guaranteed pension is not a major concern for most surveyed members, which could be linked to the increasing preference for lump-sum withdrawals over traditional pension payments.
Key finding #3 Improvement area assessment from 1e members
In the survey, we explored various topics and asked participants to assess areas for improvement mainly relating to their own 1e pension provider. Key findings include:
- Flexibility of investment strategies: 60% of participants believe the flexibility of investment products needs enhancement.
- Online tools: The majority of respondents feel that the functionality of online tools should be improved, with 63% of insured members in 1e MEPF specifically highlighting this need. Suggestions for improvements include better user experience and additional features.
- Information and support from 1e providers: About 53% of respondents seek improvements in the quality of information and support provided, while 47% are satisfied with the current offerings.
- Advice on investment strategies: Interestingly, fewer than 50% of participants believe advice on investment strategies needs improvement, which may indicate that the survey respondents are already more engaged with this type of pension plan.
- Advice on benefits and retirement planning: 58% of members suggest improvements are necessary in this area.
- Solutions for leaving a 1e pension plan: This emerged as a significant gap, with 69% of members stating that exit solutions should be improved. This is a crucial issue, and the Federal Council has submitted the proposed legislative changes for consultation in October, which will continue until the end of January 2025.
- Administrative costs: A substantial 77% of members see significant potential for reducing administrative costs, aligning with findings from our 1e pension plan study, which suggests providers need to scale operations.
- Asset management costs: Similarly, 72% of participants see room for improvement in asset management costs. While our 1e pension plan study indicates that TER (Total Expense Ratio) is generally in line with average pension funds, there are notable differences between providers.
Qualitative feedback from insured members
Participating members also provided qualitative feedback, addressing both 1e solutions in general and specific 1e pension funds. This feedback was grouped into the following areas:
- Transparency of information provided (e.g. via online tool and/or available material) (44%)
- Product flexibility (17%)
- Portal (15%)
- Service quality (11%)
- Exit (4%)
- Cost (3%)
- Various (6%)
Top three feedback categories
- Transparency and information material: Comments focused on the need for more detailed and accessible information on investment strategy options, performance updates, and proactive communication from providers. Complexity in finding the right information on the online portal was also mentioned frequently.
- Product flexibility: Feedback highlights a general desire for greater flexibility in product offerings, especially with more sustainable investment options. While there is interest in customising underlying investments or adjusting specific asset class allocations, certain legal constraints prevent these options.
- Portal: All pension funds offer an online tool, but feedback indicated areas for improvement, particularly regarding the tool's transparency, ease of navigation, and functionalities such as simulations.
Key finding #4 Investment strategy
Majority of participating insured members less risk averse than the average 1e member
According to the survey, 18% of members reported having an equity exposure of over 40% to 50%, 27% indicated an exposure of over 60% to 80%, and 21% stated their exposure exceeds 80%.
Compared to the our 1e market study, these results suggest that the majority of participating members in this survey are less risk-averse and likely more actively engaged with their 1e pension plan. This reflects a greater willingness to take on higher risk in exchange for potentially higher returns.
