Review on the 3rd pillar Helvetia Piano Performance

Unit-linked insurance. Available as pillar 3a, or pillar 3b. Minimum premium: CHF 100/month.

The Helvetia Piano Performance product is a third pillar policy that aims to combine the yield opportunities offered by financial markets with the security of insurance protection against life's risks. It is designed for those who wish to accumulate pension capital over the long term, taking on a certain level of risk to achieve potentially higher performance, without sacrificing a safety net for themselves or their family.

This Helvetia third pillar allows for a high level of customization: it gives you the option to invest your assets in a range of selected funds (such as the strategic funds of the Helvetia Allegra family, or renowned third-party sustainable funds), calibrating the equity share—which can reach up to 100%—based on your performance ambitions and risk tolerance.

The mechanics of the Piano Performance are based on the breakdown of the premium you pay into your pension account. Unlike traditional 3a savings accounts offered by banks, a portion of your periodic contribution is used to finance administrative costs and any requested risk coverage (such as a lump sum in the event of death, a disability pension, or a waiver of premium).

The remaining part of the contribution (the actual savings premium) is entirely allocated to purchasing units of the investment funds you have chosen. Because it is linked to stock market trends, the final capital upon maturity of the pillar 3a or 3b contract is not guaranteed, and it does not earn a fixed interest rate. This means the result at retirement will depend purely on market performance and could be higher or lower than what you actually paid in over the years.

A crucial detail of how this life insurance works is that, in the very first years of the contract, a large part of the premium goes towards covering setup costs, acquisition costs, and fees for supplementary guarantees. Consequently, the surrender value (the money you would receive if you decided to close your third pillar early) is much lower than what was paid in during the initial period (as is the case with any type of insurance product).

Given all the variables involved and the long-term contractual commitment, a thorough and transparent consultation is essential to have a pillar 3a with Helvetia that fully satisfies you.

• Possibility of achieving superior performance over the long term by investing in financial markets (option to invest up to 100% in equities).
• Possibility to choose a strategy, but also to select funds individually.
• Possibility to integrate solid, customized additional coverage in case of disability and death to protect your loved ones.

• The product, depending on market performance, does not provide a guaranteed savings capital at maturity.

In our opinion, the Helvetia Piano Performance third pillar is a product suited for young people or those with a long time horizon until retirement, who wish to actively participate in the performance opportunities of the equity markets while having a real and justified need to cover themselves against the risks of death or loss of earnings (such as self-employed individuals, or those with dependents).

As with all mixed insurance-financial pension products, your final satisfaction will depend enormously on how the plan is initially configured and, above all, on the quality of the advice received.

Author: Luis Degange – Pension Consultant

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