Especially during stock market slumps:

Advantages with dynamic risk management

Tellco’s investment strategy focuses on long-term growth

With its investment strategy and dynamic risk management, Tellco pk aims for balance; the best possible return is to be achieved with the greatest possible security. This combination does not mean maximum profit, but in difficult phases it does not mean big losses either. Especially in economically challenging times, this is very important to many clients.

What is dynamic risk management?

The maximum acceptable risk of the investment strategy is periodically assessed, the market environment is systematically evaluated at regular intervals and a cost-efficient management of the equity quota is pursued. Compared to a static risk management, the share quota can vary more strongly.

Significance for the insured

With dynamic risk management, the risk of underfunding decreases, the return is better in the event of strong and prolonged bear markets and the pension fund remains capable of acting for longer. It can also be said that the insured can sleep more peacefully.

A changing market environment calls for dynamic risk management

The market environment has changed and the requirements for the risk-oriented management and supervision of pension funds have grown. To be successful in this, a professional organisation as well as long-term and performance-oriented instruments are required. The focus is on managing the equity portion of the invested assets, as this makes the largest contribution to risk.

The performance chart clearly shows how the investment strategy behaves during stock market fluctuations. The example shows the comparison to a pension fund with a more aggressive, static investment strategy. To make the data comparable, we had to align the data with our technical interest.

Performance

Less fluctuation in the coverage ratio thanks to long-term focus

It can be seen that after 2021, a very good stock market year, the coverage ratio of the comparison fund was around 5 percentage points higher than that of Tellco pk. If the markets are at a low, the difference is even greater, but with different signs: In 2011, the comparative coverage ratio is 12.5 percentage points lower than that of Tellco pk. The long-term view shows that in strong economic times Tellco pk does not gain quite as much as the biggest winners, but in bad stock market times it incurs fewer losses.

Coverage ratio

Our conclusion

Depending on the market environment, this does not necessarily result in a better return or coverage ratio in the long term compared to static risk management; however, overall and especially in the current period, the advantages clearly outweigh the disadvantages:
Especially in turbulent times, they have the certainty that the fluctuation margin in their investments is kept within limits.

News

Job loss at 58 or over: How can I secure my pension fund pension?

The supplementary benefits reform will enter into force on 1 January 2021. The aim is to rid the system of false incentives and save costs in the process. The reform involves an interesting improvement for older unemployed people in the second pillar, too. They can now opt to maintain voluntary insurance cover with the pension fund, allowing them to secure their pension entitlement.

At the moment, if you lose your job at the age of 58, then you automatically leave the second pillar. The retirement savings you have built up then have to be transferred to a vested benefits foundation. Unlike pension funds, vested benefits foundations usually do not pay out any pensions when you reach retirement age, but rather only pay out the capital. This means that you no longer receive any pension fund pension.

«Older unemployed people aged 58 or over now have the option of maintaining voluntary insurance with their pension fund.»

Once Tellco pkPRO is informed that your employment relationship has been terminated after the relevant point in time, we will provide you with information on the options available to you for continuing your insurance and the conditions that apply. You then have one month’s time to decide whether you want to remain insured and keep your entitlement to the pension fund pension.

You pay the contributions

If you decide to continue with your occupational pension benefits in the second pillar, then your insurance will remain in place in the same scope as before. This means that there will be no change in the interest rate, conversion rate or pension. The contributions, however, will change. You will pay all of the contributions, i.e. those previously paid by both you as an employee and your employer, yourself. This means that you will pay the contributions for the risks of death and disability and the administrative costs, as well as the savings contributions where appropriate.
If you have withdrawn pension fund assets for the promotion of home ownership, you can repay these amounts based on the same rules if you volunteer to continue your insurance. This increases your retirement capital and means that you receive a higher pension once you retire.

You can continue to exploit the tax benefits

You can still make buy-ins in accordance with the statutory provisions if you opt to continue your insurance. The contributions, and any buy-ins, remain deductible from your taxable income if you continue your insurance. This means that continuing your insurance also allows you still get to reap the tax benefits in full.

The most important summarized
  • Improvement for older unemployed people thanks to the supplementary benefits reform
  • Remain insured voluntarily with the pension fund
  • Continue paying contributions
  • Qualify for tax benefits
Information on the subject
The most important things about pillar 2 Tellco vested benefits solution More about private pension 3a

Read more about the following topics:

Occupational pension Pension fund Private individuals
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