Vested benefits foundation fees: what to understand.
Not every vested benefits account has the same fee structure. Here is how to read them, and how to choose between an autonomous and a managed approach.
A vested benefits foundation charges fees. That is normal — it manages your assets, earns returns, and provides regulatory safety. But fee structures vary widely between foundations, and the grid is not always intuitive. This article unpacks the six fee items to know, then tackles the real question: how to choose between an autonomous (low-cost) approach and a managed one.
The six fee categories to examine
1. Annual administration fees
The most visible. Typically between CHF 0 and 100 per year for a simple account. Some banking foundations have removed them to attract clients; others charge them. Not the heaviest line, but the first one people look at — sometimes wrongly.
2. Securities management fees (TER)
If you invest your assets in funds, a Total Expense Ratio (TER) applies. It includes the manager, the custodian, and the foundation's fees. Three main offer families:
- Traditional active solutions (managers selecting securities, following a mandate, actively rebalancing): 0.9 to 1.5% per year. These fees pay for human selection work and continuous monitoring — in exchange for sought outperformance or a controlled risk profile.
- Index / ETF solutions (market index replication): 0.3 to 0.7% per year. Low fees, strong transparency, but no active steering.
- Cash or direct bond solutions: 0.1 to 0.3%. For conservative profiles or short horizons.
3. Exchange fees
If the foundation invests in USD or EUR-denominated securities, or if you request a payment to a foreign-currency account, exchange fees apply. Typical spreads: 0.5 to 1.5% on the interbank rate. On CHF 100,000 changed to EUR, that is CHF 500 to 1,500 in one go, often invisible.
4. Opening / closing fees
Many foundations charge nothing at opening. Closing, however, can cost CHF 0 to 200. And some foundations charge an "outgoing transfer fee" they prefer to call something else, up to CHF 300.
5. Transaction fees
If you change your allocation (rebalancing, portfolio reorientation), some foundations charge 0.1 to 0.5% per operation. To check especially if you plan to rebalance several times per year.
6. Brokerage and stamp duty
The federal securities transaction tax (stamp duty) hits some operations. Often included in the TER, but worth checking. For Swiss funds, most are exempt.
Three typical foundation profiles
| Profile | Indicative annual fees | What is included |
|---|---|---|
| Traditional or cantonal bank | ~1.1 to 1.6% | Banking advice, active in-house fund management, branch access, several investment profiles |
| Digital bank / independent foundation | ~0.4 to 0.8% | Index allocation (ETF), online interface, little human support |
| Cash account without investment | A few dozen CHF | No market risk, no potential return beyond the interest rate |
The fee effect over 20 years: a worked example
Marc transfers his LPP assets to a vested benefits foundation and stays there until 58. Securities investment with hypothetical 4.5%/year gross performance.
- Initial assets
- CHF 120,000
- Duration
- 20 years
- Gross performance / year
- 4.5%
- Comparison
- 0.5% vs 1.4% fees
- Final capital — 0.5% fees
- CHF 263,800 autonomous low-cost foundation
- Final capital — 1.4% fees
- CHF 222,100 actively managed foundation
- Gross difference over 20 years
- CHF 41,700 ~19% of initial capital
Questions to ask before opening an account
Whichever foundation you look at (low-cost or with support), ask these six questions in writing and keep the answer:
- What are the annual administration fees in CHF? Are they degressive with the balance?
- What is the TER of each investment solution, with supporting document (fund factsheet)?
- Are there opening, closing, or outgoing transfer fees? How much exactly?
- How is uninvested cash remunerated (interest rate on the liquid part)?
- What are the exchange fees if the investment is in USD/EUR?
- What human support is included, and how to access it (annual review, dedicated contact, platform)?
The special case of policies
If you compare account vs vested benefits policy, know that policies have an even less transparent fee structure: insurance fees (risk coverage), acquisition fees spread over the first years, and envelope management fees are often intertwined. Always ask for the year-by-year surrender values table before signing. A standard document any insurer can provide.
Transferring to another foundation — the procedure
Identified a foundation better suited to your profile? Transfer is free or nearly free in 95% of cases.
- Open the account or policy at the new foundation.
- Fill in the transfer request form (provided by the new one).
- The new foundation handles the procedure with the former.
- Usual delay: 2 to 6 weeks.
- No tax: a transfer between vested benefits foundations is tax-neutral.
And after the Pillarum search?
Our core business is recovering your LPP assets in Switzerland. A single power of attorney, 4 to 6 weeks, free. But once your situation is mapped, many clients then ask us what to do with these assets: where to consolidate them? what allocation for the next 10 or 20 years? what tax approach?
For those who wish, we offer post-search support on pension optimization — foundation choice, asset structure, allocation suited to profile and horizon, annual monitoring. A separate, paid, always optional service: the search itself stays free and unconditional. Just mention it to the team at the end of the file.
- 01Six fee categories to examine — not only the administration fee shown in large print.
- 02Over 20 years, the net gap between a low-cost approach and active management depends as much on manager quality as on gross fees.
- 03The right choice depends on your profile: autonomous → transparent low-cost. Supported → quality active management, provided you understand its value.
- 04At the moment of withdrawal, the foundation's canton of domicile counts as much as the fee profile.
To understand the general mechanics of vested benefits, read our full guide. And to situate the foundation in the Swiss landscape, see funds, foundations, Central 2nd-Pillar Office — who does what.