CERN Fellows, don’t splash that cash!
When their CERN contracts expire and they leave the Organization, Fellows recoup the amounts paid into the Pension Fund by and for them every month. If they invest this money well, right from the outset, it can grow into a nice little nest-egg by the time they reach retirement age.
As employed members of the CERN personnel, Fellows are members of the Organization’s Pension Fund. Accordingly, a specific amount is withheld from their salary every month (see first box) and, as the months go by, this gradually accumulates into their transfer value (i.e. their capital). When their contracts expire, Fellows may opt to transfer that money directly into another pension fund (subject to the national laws of the destination country and, unfortunately, not possible everywhere), or take it in cash. This is because only employed members of the personnel who have at least five years of service with the Organization are entitled to remain beneficiaries of the CERN Pension Fund for life*. But the capital accumulated by Fellows after three years of service at CERN is upwards of 31,000 CHF, a tidy little sum!
But what should I do with this capital? “Fellows have several options for making their money grow,” says Théodore Economou, Chief Executive Officer of the CERN Pension Fund. ”Given that transfers to other pension funds aren’t possible everywhere, I believe that investing the money remains one of the best options, especially given the variety of investment vehicles available - savings accounts, life insurance, real estate (especially when added to capital already saved separately)… and the list goes on.” Even though retirement probably seems a (very, very) long way off to most Fellows, they must understand that it’s never too early to make the right choices.
Why invest this money? Let’s do a rough calculation: take a Fellow aged 25 who leaves CERN after three years of service. As mentioned above, the Fellow will recoup approximately 31,000 CHF. Now, if he or she decides to invest this money in a savings account at an interest rate of 1.25%, a lump sum of 46,500 CHF will have accumulated by the time of retirement, let’s say at 65. But if the same former fellow places the same 31,000 CHF on the same savings account at the age of 45, the amount accrued 20 years later will be only 38,750 CHF.
Of course, each case is different, so the idea is not to give personalised advice. The CERN Pension Fund’s Benefits Service is happy to inform Fellows of their rights according to the Rules and Regulations of the CERN Pension Fund. We invite all Fellows to contact:
CERN Pension Fund Benefits Service
Building 5 – 5th floor
Offices 019 - 021 - 023
+41 22 767 87 98
+41 22 767 91 94
e-mail: Pension-Benefits@cern.ch
Alternatively, visit the Pension Fund’s website: http://pensionfund.cern.ch/en/
Offices are open to all members and beneficiaries on Tuesdays, Wednesdays and Thursdays from 9.30 a.m. to 11.30 a.m. and from 2.30 p.m. to 4.30 p.m. or by appointment.
* Please be aware that it is possible to purchase years of service if you are transferring funds from another pension fund into the CERN Pension Fund.
| Fellows and the Pension Fund Fellows who have dissected their latest salary statement will have noticed that a contribution for the CERN Pension Fund has been withheld from their gross salary this month, like every month, as follows:
The reference salary, which currently stands at 5,948 CHF, applies to all Fellows, whatever their gross monthly salary may be, and may be indexed to the cost of living. The amount to which Fellows are entitled when they leave CERN – currently 31,477 CHF after three years of service – corresponds to 14.7% of the Fellows’ reference salary, calculated over three years. |
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