Individual solution (FCT 1e)
Pension fund with Individual Choice of Investment Strategy
The Individual solution or Individual Choice of Investment Strategy solution is intended for companies wishing to offer their executives an extra-mandatory occupational benefits plan that leaves each of them the freedom to manage their own investments within a defined framework in accordance with the laws.
In addition, for the companies under the international accounting standards IFRS/USGAAP, the Individual solution provides an effective way to reduce their balance sheet commitments, while offering their executives an attractive benefits package adapted to their risk profile.
Structure and organisation
Every affiliated company constitutes a group of Insureds within the FCT 1e. Each Pension Fund has its own Pension Committee. This body is not necessarily a joint Committee but includes at least one representative of the employer. The Pension Committee of each Fund is responsible for the matters related to:
- its pension plan(s)
- its reinsurer (the Foundation also offers an insurance at an attractive collective rate)
- its custodian(s)
- its investment adviser (optional)
- its individual investment strategies (with a maximum of ten strategies of which one must be a low-risk strategy)
- its asset manager(s)
Each Insured of the Pension Fund chooses its individual investment strategy among the various investment strategies offered by the Pension Committee, in compliance with legal regulations.
The FCT offers three disctinct investment options:
- "pre-selected strategies",
- "customized strategies",
- "individual strategies".
The choice of investments and the partners (custodian bank and asset managers) in charge of their implementation must be monitored on a regular basis in accordance with the Foundation's Investments Rules.
Each Insured can change its investment strategy on a monthly basis though the secured online communication platform.
He shall declare that he has read the available information and that he understands and accepts the respective risks and opportunities related to its individual choice of the investment strategy.
The Insured shall further declare that he has verified that the investments made by the Pension Administrator do indeed correspond to the strategy he has chosen.
Investment fluctuation reserve
No investment fluctuation reserve is required considering the particularities of the Pension Funds with Individual Choice of the Investment Strategy.
The Insured bears the investment risk related to his choice of the investment profile (an investment profile with capital preservation being the default strategy) and accepts that his individual savings account will be impacted by the net performance, both positive and negative. Death and disability risk must be reinsured. The funded status of the individual savings accounts and the Pension Fund is therefore always 100%.
The Individual Pension Fund with the individual choice of investment strategy is a supplementary occupational benefits insurance option complementary to the base benefits solution with the following elements determined by its Pension Committee:
- savings plan
- risk benefits
- financing method
Interest rates on savings accounts
The interest rate on savings accounts corresponds to the actual net performance (positive or negative) of the investment profile chosen by each Insured.
As a rule, retirement benefits are paid as a lump sum. The Pension Committee may also consider the retirement pension to be bought back from the death and disability risk insurer.
Each Pension Committee shall choose a congruent reinsurance covering the death and disability risks, either through one of the collective contracts negotiated by the FCT 1e, or through an individual contract with a Swiss insurer approved by the FCT 1e.