Interest rates significantly higher than the minimum rate at the Vita Joint Foundation

Interest rates significantly higher than the minimum rate at the Vita Joint Foundation

In 2017 the insured of the Vita Joint Foundation can look forward to attractive interest rates on their retirement assets. The foundation pays interest at a rate of 2 percent on their mandatory assets. That is 1 percentage point higher than the minimum rate of interest under the BVG. Super-mandatory assets earn interest at a rate of 2.5 percent.
Once again the Vita Joint Foundation is paying interest on the assets of its insured at a rate that is above the minimum rate decided by the Federal Council. Despite the currently more difficult investment environment and negative interest, the interest earned with the foundation is significantly higher than 1 percent. 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 SST Vita 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.
Around 20,000 companies with a total of 117,000 employees have entrusted their occupational retirement provision to the Vita Joint Foundation.

*) According to the current regulations on provisions and reserves, a new interest reserve is not formed until after a coverage ratio of 106 percent is reached.

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Zurich Insurance Company Ltd and Zurich Life Insurance Company Ltd are responsible for dealing with the commercial and personal lines of the Zurich Insurance Group in Switzerland and the Principality of Liechtenstein. Zurich Switzerland is one of the largest insurers in Switzerland and appears on the market under the names Zurich and Zurich Connect.

Zurich Insurance Group is a leading multi-line insurance provider with a global network of subsidiaries and offices in Europe, North America, Latin America, Asia-Pacific and the Middle East as  well as other markets. It offers a wide range of general insurance and life insurance products and services for individuals, small businesses, mid-sized and large companies as well as multinational orporations. Zurich employs about 55,000 people serving customers in more than 170 countries. The Group, formerly known as Zurich Financial Services Group, is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt program (ZURVY) which is traded over-the-counter on OTCQX. Further information about Zurich is available at