Freelance journalists in Switzerland are more fortunate than freelancers in other occupations when it comes to pensions. To date, only freelance journalists have had the opportunity to join the country’s second pillar pensions system.

Switzerland has two schemes for journalists. One is the Pensionskasse for Journalists based in Freiberg. The other is the Pensionskasse Freelance, based in Bern.

Rolf Müller, managing director of the Pensionkasse Freelance since 1999, says: “Pensionskasse Freelance is very special in Switzerland. A pension fund like ours does not exist for other professions. If you are working as a self-employed builder or plumber, you do not have this possibility. What is more special, there are two pension funds catering for this client base. So not only do freelance journalists have the chance to go into a pension fund, they have the chance to choose which one they want to go to.”

Pensionskassen Freelance was launched in 1985 when the BVG/LLP law introduced the idea of compulsory second pillar pension for all employees earning more than 40% of average earnings.

The scheme was set up by Comedia, a union for 15,000 Swiss journalists, and was aimed at freelance journalists and photographers working in print and other media. The scheme now has now assets of CHF 45m (€28m) and a history of slow but steady growth. Membership has grown from 440 in 1994 to 580 today.

Membership of the fund is open to freelance journalists who are either not insured or only partly insured with the compulsory pension plans of their employer. Journalists who are compulsorily insured members of second pillar schemes can also use the Pensionskasse Freelance scheme to insure income earned independently of their employer.

Managing a membership of freelance journalists poses particular difficulties, Müller says, chiefly because of the nature of their work. “Freelance journalists will have a number of different employers if they work for different journals. At the moment, we have 240 companies or magazines that pay contributions to us. Set against a membership of 580 that is quite a lot.

Membership is also voluntary, unlike the BVG/LLP system for full-time workers, where membership of a second pillar pension fund is mandatory. “Normally, they are not obliged to join a pension fund, and the employer is only obliged to pay the contribution if a freelance chooses to join a pension fund.”

Yet one of the advantages of membership of the Pensionskasse Freelance is that the total earnings of the freelance is insured. “Under the BVG law, if you earn, say, CHF 40,000 a year, normally only CHF 20,000 is insured. So the pension is paid out only on this CHF 20,000. With us, the pay-out is based on the total salary.”

Contributions are 12.5% of salary. Under the BG/LLP regulations, the employer pays half of this. There is no minimum size of salary for insurance purposes. However, employers are only obliged to pay half of the contributions if the total obtained from all employers annually exceeds the threshold which, since 1 January, has been set at CHF19,890.

The assets of the Pensionskasse Freelance have been managed in two distinct stages. In the first, an insurance company bore the fund’s retirement, invalidity and death risk. Müller explains: “Membership at the beginning was quite small and there was almost no money in it. So in the beginning we gave the risk to an insurance company. They also took on the investment risk.”

The insurer provided the minimum guaranteed return of 4% a year required by law - more if there was a surplus - a guaranteed return that has since been lowered to 2.5% to reflect the fall in real interest rates.


s membership and contributions rose, however, the fund felt able to take responsibility for the risk of old age, invalidity and death. “Assets have grown quite considerably, especially in the last few years,” says Müller. “This is the result of good returns and the growth of the fund’s contributions.”

More money is flowing in than out, he says. The average age of fund members is 42 and only 10% of the membership has taken retirement benefits so far. Pensions are paid either as lump sum or as a monthly pension, or a combination of both. To date only two members have chosen a pension. The remainder have taken lump sums.

In 1999, when assets totalled around CHF 20m, Pensionskasse Freelance began to take over the management of its assets from the insurer, placing them with Zurcher Kantonalbank, the bank of the canton of Zurich. “We chose them because they had a good experience with sustainable investments. They also produce good returns.”

The transfer of management of the assets from insurer to bank has been a phased process, says Müller. “We didn’t want to start from zero to 100% because of the changes in the market. We didn’t want to have to invest all the assets at absolutely the wrong moment. We started managing the assets ourselves in 1999 so we would perhaps have lost even more if we had placed all the money in the market between 2001 and 2002.

“So we have done it step by step. Each year the insurer has paid back to us one quarter of the assets, and the last quarter will be paid this year.”

The bank manages a portfolio of equities and bonds within investment limits, set by the fund in 2004, of 33% equities and 40% bonds. The equity allocation is split equally between domestic and global securities, while 75% of the fixed income allocation is denominated in Swiss francs, with the remainder in foreign currencies.

The bank does not stray far from these investment limits, Müller says. “Normally they do not have much flexibility, and will move only 1% or 2% plus or minus.”

Investment strategy is decided by an investment committee, comprising Müller and members of the pension fund. The committee also takes advice from representatives of the Zurcher Kantonalbank.

The only asset classes which Müller and his investment committee manage themselves are real estate and private equity. The fund invests in real estate indirectly, says Müller. “We select real estate funds and REITS, so we are not in that sense managing real estate ourselves.”

Real estate exposure now accounts for 20% of the assets, some CHF9m, with 60% allocated to domestic funds, and 40% to global.

“Real estate investment has performed well, especially the global part of it, with returns of more than 20%, about the same as equities,” says Müller. “Some of the exposure is equity as well in real estate companies. This means that if the equity markets go up, real estate companies profit as well. On the other hand they should be more stable if the markets go down because they are backed by real estate.”

Müller’s strategy is to buy and hold value investments. “If they do not perform immediately, we have a lot of patience. We know they will eventually perform. We also look for a good price. We don’t like to pay too much, and we don’t buy real estate funds with a record of high performance because their net asset value is normally high as well.

Pensionkasse Freelance manages its exposure to private equity internally. “We think we can add a little bit of risk with private equity,” says Müller.The fund invests particularly in firms involved in sustainable energy, generating wind, water and solar power.

“That is our policy because we were founded by the union and we believe it is in their interest that the enterprises we invest in care about their employees as well.” Müller says. Pensionskasse Freelance, perhaps like many of its members, is a small enterprise with big ideas.