QUALIPENSION Score Methodology
Full documentation of the methodology used to assess the quality of Swiss occupational pension solutions.
1. Introduction
The QUALIPENSION score is a composite indicator of the overall quality of an occupational pension solution (2nd pillar) across 6 core axes. The methodology was developed to give companies and insured members an objective tool for diagnosis and comparison.
The QUALIPENSION score is expressed on a scale of 0 to 100 and is based on 25 questions across 6 weighted evaluation axes.
2. The 6 evaluation axes
📈 Long-term performance
30%Assesses the fund's ability to generate sustainable returns for its insured members.
Questions covered (3):
- • B1: Average interest credited on retirement assets (last 5 years)
- • B2: Formalisation of the long-term investment strategy
- • B3: Member participation in surpluses
🛡️ Security & Resilience
15%Measures financial strength and the ability to absorb market shocks.
Questions covered (3):
- • C1: Current coverage ratio
- • C2: Level of fluctuation reserves
- • C3: Formal reserve policy
⚖️ Intergenerational equity
10%Analyses the balance between active members and pensioners, including implicit transfers.
Questions covered (3):
- • D1: Conversion rate applied (extra-mandatory portion)
- • D2: Implicit redistribution from active members to pensioners
- • D3: Corrective or adjustment mechanisms
🏛️ Governance & Transparency
25%Evaluates management quality, transparency and governance practices.
Questions covered (8):
- • E1: Clarity of pension regulations
- • E2: Quality of reporting to the committee/employer
- • E3: Role of the pension committee in practice
- • E4: Transparency on management fees
- • E5: Financial expertise of the governance body
- • E6: Policy on term limits
- • E7: Periodic re-tendering of mandates
- • E8: Transparency on executive remuneration
🔄 Flexibility & Services
10%Assesses the options available to insured members and the quality of service provided.
Questions covered (4):
- • F1: Easy access to voluntary buy-ins
- • F2: Number of investment strategies available
- • F3: Retirement options (lump sum, pension or a combination)
- • F4: Online access to personal information
💰 Cost efficiency
10%Assesses value for money and how effectively fees are managed.
Questions covered (4):
- • G1: Explicit management fees (TER)
- • G2: Estimated implicit costs
- • G3: Perceived value for money
- • G4: Transaction costs on asset growth
3. Score calculation method
3.1 Answer scoring
Each question has between 3 and 5 answer options, each carrying a score from 0 to 100:
| Score | Meaning |
|---|---|
| 100 | Excellent - Best practice |
| 75 | Very good - Above average |
| 50 | Average - In line with the market norm |
| 25-40 | Insufficient - Below average |
| 0 | Critical - Non-compliant or absent |
3.2 Axis score calculation
Each axis score is the arithmetic mean of the scores on the questions within that axis:
3.3 Overall score calculation
The overall QUALIPENSION score is the weighted average of the 6 axis scores:
Calculation example:
- Performance (80) × 30% = 24.0
- Security (70) × 15% = 10.5
- Equity (60) × 10% = 6.0
- Governance (75) × 25% = 18.75
- Flexibility (65) × 10% = 6.5
- Costs (55) × 10% = 5.5
- Overall score = 71.25 → 71/100
4. Interpreting the score
A very high-quality pension solution, in line with market best practice. Little room for improvement.
A solid solution with a few areas for improvement, performing above the market average overall.
An average solution with significant scope for optimisation on several axes. Professional guidance is recommended.
A solution with notable weaknesses. In-depth analysis and corrective action are strongly recommended.
A solution requiring urgent review. Insured members may be exposed to significant risks. Switching to a different solution should be considered.
5. Detailed question scoring
📈 Performance axis (30%)
| Question | Scoring |
|---|---|
| B1. Average interest credited (5 years) | <1%: 0 | 1-1.5%: 25 | 1.5-2%: 50 | 2-2.5%: 75 | >2.5%: 100 |
| B2. Formalised investment strategy | No/unknown: 0 | Partial: 50 | Documented: 100 |
| B3. Participation in surpluses | Rare/none: 0 | Occasional: 50 | Regular: 100 |
🛡️ Security axis (15%)
| Question | Scoring |
|---|---|
| C1. Coverage ratio | <100%: 0 | 100-105%: 40 | 105-110%: 75 | >110%: 100 |
| C2. Fluctuation reserves | Insufficient: 0 | Building up: 40 | In line with target: 75 | Above target: 100 |
| C3. Reserve policy | No: 0 | Partial: 50 | Documented: 100 |
⚖️ Intergenerational equity axis (10%)
| Question | Scoring |
|---|---|
| D1. Conversion rate (extra-mandatory) | >6%: 0 | 5.5-6%: 40 | 5-5.5%: 75 | <5%: 100 |
| D2. Redistribution from active members to pensioners | Strong: 0 | Moderate: 40 | Low: 75 | None/corrected: 100 |
| D3. Correction mechanisms | No: 0 | Partial: 50 | Formalised: 100 |
🏛️ Governance & Transparency axis (25%)
| Question | Scoring |
|---|---|
| E1. Pension regulations | Hard to understand: 0 | Complex: 50 | Clear: 100 |
| E2. Reporting to the committee | Minimal: 0 | Standard annual: 50 | Detailed quarterly: 100 |
| E3. Role of the pension committee | Formal only: 0 | Advisory: 50 | Decision-making: 100 |
| E4. Transparency on management fees | Opaque: 0 | Partial: 50 | Full (TER): 100 |
| E5. Financial expertise of the governance body | Insufficient: 0 | Basic: 50 | Proven expertise: 100 |
| E6. Term limits | No limit: 0 | Informal rotation: 50 | Formal limit: 100 |
| E7. Re-tendering of mandates | Not practised: 0 | Occasional: 50 | Every 3-5 years: 100 |
| E8. Transparency on executive remuneration | Not disclosed: 0 | On request: 50 | Published: 100 |
🔄 Flexibility & Services axis (10%)
| Question | Scoring |
|---|---|
| F1. Voluntary buy-in options | Difficult: 0 | With restrictions: 50 | Simple and clear: 100 |
| F2. Investment strategies available | Only one: 0 | 2 strategies: 50 | 3 or more: 100 |
| F3. Retirement options | Pension only: 0 | Limited choice: 50 | Lump sum/pension/combination: 100 |
| F4. Online access | No access: 0 | Basic: 50 | Full portal: 100 |
💰 Cost efficiency axis (10%)
| Question | Scoring |
|---|---|
| G1. Management fees (TER) | >1%: 0 | 0.8-1%: 25 | 0.5-0.8%: 50 | 0.3-0.5%: 75 | <0.3%: 100 |
| G2. Implicit costs | High/unknown: 0 | Moderate: 50 | Low and documented: 100 |
| G3. Value for money | High costs: 0 | Acceptable: 50 | Excellent: 100 |
| G4. Transaction costs | Not optimised: 0 | Standard: 50 | Optimised (pooling): 100 |
6. Limitations and disclaimers
The QUALIPENSION score is a diagnostic indicator, not an investment recommendation. It should be complemented by an in-depth review of your individual circumstances.
Answers are self-reported by the user. The quality of the assessment depends on the accuracy of the information provided.
The weightings reflect a balanced view of what makes a quality pension solution. They can be adjusted to each organisation's specific priorities.