Billionaires report 2017: New value creators gain momentum

What a difference a year makes. In last year’s report, we asked the question “Are billionaires feeling the pressure?” as billionaire wealth dropped.

This year we’ve seen a dramatic return to growth. Billionaire wealth has risen 17% in 2016, double the rate of the MSCI AC World Index. Despite a period of heightened geopolitical uncertainty, the world’s ultrawealthy are flourishing.

In the pages that follow we explore the drivers behind this growth and some emerging trends.

  • There are startling figures: for the first time in history there are now more billionaires in Asia than in the US, while this year’s 145 new billionaires employ at least of 2.8 million people.
  • We uncover the increasingly powerful role played by networks: more and more families are working together on new ventures and younger entrepreneurs are tapping into a broader group of contacts to orchestrate deals.
  • We also shine a spotlight on the growing role billionaires play in art and sports. Billionaires have made over half of sports club acquisitions in the last two years, while a new generation of art patrons is making new and unique collections more accessible to the public.

Billionaires are enjoying resurgent growth and creating new legacies, driven by a shift in the geography of global influence. We can expect many more such shifts in the future as Asia, and in particular China, continues to grow in stature. We look forward to charting these developments in the years to come.

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New 1e pension legislation released – removal of minimum guarantee confirmed and rules around investment strategies clarified

The Swiss Federal Council has released the long-awaiting final wording of the new law that will govern 1e pension plans. 1e pension plans allow employees to choose their own investment strategy from a range of options. The plan can apply on earnings above CHF126’900 (4.5 times the maximum single AHV/AVS pension).

The new legislation applies from 1 October 2017. The main change is largely as expected – the Vested Benefit Act has been changed to exclude the need for a minimum guarantee at leaving. This change should mean that companies can account for these plans as defined contribution plans under IFRS/US GAAP, meaning no balance sheet liability, provided the plan meets the conditions for this.

The main changes in the ordinance

  • Plans can offer up to maximum 10 different investment strategies that apply to all of an employee’s savings. The limit is applied to a pension arrangement (“Vorsorgewerk”) rather than a provider.
  • At least one “low risk” investment strategy has to be offered. Low risk is broadly defined as cash and debt investments in Swiss francs with good credit-worthiness and an average duration below 5 years.
  • Remove the minimal benefit requirement of articles 15 and 17 of the Vested Benefit Act. For existing plans this requirement is removed once the plan offers a low risk strategy.
  • The definition of maximum savings in a 1e plan has been clarified.
  • Transition rules apply: if you already have a plan this has to comply with the new rules, in particular the new investment strategy offering by the end of 2019.

What now?

If you already have a 1e plan: you’ll need to review and possibly update the plan to meet the new rules. To be able to remove the minimal guarantee, the main barrier to defined contribution accounting under IFRS/US GAAP, one of the strategies you offer needs to meet the “low risk” definition. The plan design may need to be reviewed to ensure it complies with the maximum savings limits. Your plan will need to fully comply with the new rules by the end of 2019.

If you don’t yet have a 1e plan: the legislation is now clear and applies from 1 October 2017. So if your provider is ready, any project to implement a 1e plan should now have a clear path forward. How complex this will be depends on your own situation. Companies with corporate pension funds may find implementing a 1e plan with a separate provider more challenging due to the impact this has on their current fund. Given the timing, need for communication to employees and contractual implications, implementing a 1e plan by 1 January 2018 may be too soon. But starting as early as possible should mean you are on course for 2018.

More details

You can find more details on 1e plans through the following article. The full ordinance can be found here.

Swiss pension outcomes are falling – could “matching” be part of the answer?

Low, even negative, interest rates and uncertain growth prospects is becoming a “new normal” in Switzerland. The impact on pension fund finances is well documented – pressure on funding levels, tough to find the right investment opportunities and focus on cost transparency. This environment also poses challenges for insured members, and as a result their employers. Expected retirement outcomes have fallen. What does this mean for employees and employers? 

10 years ago an insured person would expect higher returns on any money they invest for retirement than they would today. The mandatory interest credit for Swiss pension plans according to BVG/LPP was 2.50% in 2007 compared to 1.00% today.  Ten-year Swiss government bonds yields have fallen from 2.6% to -0.1% in the same period. This not only affects expected returns on the assets set aside but also the cost of providing an income for life after retirement. Life expectancies for retiring pensioners have increased by about 1 year for females and 2 years for males in that time which also needs to be funded.

All of these factors have had a major impact on retirement outcomes. Based on our calculations, in 2007 a 40 year-old could invest CHF 7’100 and expect a pension of a CHF 1’000 a year for that investment. Today a 40 year-old would expect to have to invest CHF 14’700 – more than doubling of the cost of retirement over 10 years. In that time, inflation expectations have also fallen, but overall the cost of retirement has increased.

What can pension funds do?

Pension funds aim according to our experience to maintain the level of retirement benefits they provide while financing the promises already made. But pension funds are in a “zero-sum” game – without extra funding, members will ultimately receive lower benefits on average when results are not what was expected. Robust analysis and forecasting of what employees can expect to receive, combined with clear communication may be the best what they can do. Other measures are down to employees and employers as recipients and sponsors of retirement benefits.

What does this mean for individuals and employers?

Find higher returns? In conventional collective Swiss plans, employees share in the overall returns of the fund as they are credited to them. This limits opportunities to take more risks, with an expectation of higher returns. For higher earnings, it is possible to have individual strategies through a “1e” pension plan. These plans can be used to seek higher returns, but this may not be suitable for all.

Later retirements? Without saving more, employees have to retire later for the same outcome.  In some ways this is only reasonable: If life expectancies increase without changing retirement ages, the proportion of life we spend in retirement rises. Employers may have to prepare for the ageing effect on their business – not only their workforce recruitment and retention, but possibly their business strategy and target markets.

Employers pay more? One answer may be employers paying more. But employers face economic challenges themselves, with increasing competition and pressure for results. For most companies, raising costs or investing cash may not be palatable.

Employees pay more? Creating more awareness of the individual options available for the employees is one option. Additional voluntary employee contributions are typically deductible for tax purposes. Some employees don’t have confidence in their pension plan and are not keen to lock away money until retirement.

How can companies create further incentives for employees to pay more? A look abroad could help.

Could “matching” be part of the solution?

In the US as well as the UK, contribution “matching” is widely used in pension plan design. Employer contributions are adjusted to “match” those of employees. When an employee contributes a percentage of their salary into the plan, the employer contributes an amount directly linked to what the employee pays. This could be 1:1 – i.e. if the employee pays 2% of pay, employer pays the same. Or some ratio like 2:1 or 1:2.

The big advantages of matching are two-fold: it encourages employees to pay more; and it focuses employer spending where it is most valued by its employees. One of our clients challenged the common Swiss plan option of employers paying the same for all employees, whereas employees can choose their level: “Why can employees choose to pay less, but I cannot follow when they do?” A reasonable question that matching helps to address.

The challenge is that legislation in Switzerland currently restricts the ability to apply matching within the regular plan. The law requires the employer contribution rate to a pension plan to be the same for all employees in the same situation (e.g. age, grade etc). “Matching” can be done through the buy-in system. So with the right plan design, matching can be incorporated within the Swiss plan.

This won’t for every situation as the use of buy-ins is subject to certain caps and restrictions which may become a barrier. Plan administration may be more complex. But in challenging times for pension outcomes, new solutions may be needed.


Richard Köppel
Pensionskassen-Experte SKPE, People and Organisation
Tel. +41 58 792 11 72
Adrian Jones
Director, People and Organisation
Tel. +41 58 792 40 13

Switzerland: New social security treaty between Switzerland and China

A social security treaty between Switzerland and the People’s Republic of China (China) will enter into force on 19 June 2017. The maximum posting period is 72 months. For the duration of the posting employees (regardless their nationality) are exempt from the compulsory insurance obligations of the country of occupation which are covered in the social security treaty. As from 19 June 2017 it will be possible to obtain a Certificate of Coverage.


Click here for more details



Véronique Schaller
+41 58 792 5036

Natalia Graf
+41 58 792 4324


Winning the fight for female talent: How to gain the diversity edge through inclusive recruitment

Gain the diversity edge through inclusive recruitment

Today, more and more CEOs regard talent diversity and inclusion as vital to their organisation’s ability to drive innovation and gain competitive advantage. And as businesses across the world inject greater urgency into their gender diversity efforts, we’re seeing an intensifying focus on hiring female talent. In fact, 78% of large organisations tell us they’re actively seeking to hire more women – especially into more experienced and senior level positions.

PwC’s new report, Winning the fight for female talent, explores how organisations are seeking to deliver on their gender diversity attraction goals. We also examine the impact of these approaches and – more generally – how they’re matching up to the career aspirations and diversity experiences and expectations of the modern workforce.

Download the full report here.


Steady progress in boosting female economic empowerment, but gender pay gap still a major issue

PwC Women in Work Index

Prize of pay parity in OECD could mean US$2 trillion increase in total female earnings

Latest PwC Women in Work Index reveals:

  • Gradual improvement in female economic empowerment in OECD
  • Nordic countries still lead the way, with Iceland, Sweden and Norway taking top 3 spots
  • Poland climbs into top 10 thanks to gains in cutting female unemployment
  • Other top 10 places held by New Zealand, Slovenia, Denmark, Luxembourg, Finland and Switzerland
  • But gender pay gap poses major challenge, with parity still decades if not centuries away
  • Potential prize of closing the gap could boost total female earnings by US$2 trillion

21st February, 2017 – Slow but steady progress continues to be made in OECD countries towards greater female economic empowerment, according to a new PwC report.

But the gender pay gap continues to be a major issue, with the average working woman in the OECD still earning 16% less than her male counterpart – despite becoming better qualified.

The latest PwC Women in Work Index, which measures levels of female economic empowerment across 33 OECD countries based on five key indicators, shows that the Nordic countries – particularly Iceland, Sweden and Norway – continue to occupy the top positions on the Index. Poland stands out for achieving the largest annual improvement, rising from 12th to 9th. This is due to a fall in female unemployment and an increase in the full-time employment rate.

PwC analysis shows that there are significant economic benefits in the long term from increasing the female employment rate to match that of Sweden; the GDP gains across the OECD could be around US$6 trillion.


When it comes to closing the gender pay gap, countries such as Poland, Luxembourg and Belgium could see the gap fully close within two decades if historical trends continue. But much slower historical progress in Germany and Spain means that their gap might not close for more than two centuries, although making this a policy priority could accelerate progress. The gains from achieving pay parity in the OECD are substantial – it could result in a potential boost in female earnings of around US$2 trillion at today’s values.

Download the full report here.



Hans Geene
+41 58 792 9124

Charles Donkor
+41 58 792 4554

New report: PwC’s 20th Global CEO Survey – Harnessing the power of human skills in the machine age

The talent challenge: Harnessing the power of human skills in the machine age

pwc_ceo survey_2017

With the rise of automation, we’ve reached a point where we’re questioning the role people play in the workplace. How to achieve the right mix of people and machines in the workplace is the critical talent question of our age.

Fifty-two percent of CEOs say that they’re exploring the benefits of humans and machine working together and 39% are considering the impact of Artificial Intelligence on future skills needs. This is a delicate balancing act for CEOs in every sector and region.

However, you can’t have a machine age without humans and 52% are planning to increase headcount over the next 12 months. They are focused on obtaining the skills that they need to create a world where humans and machines work alongside each other.

Different skills will be needed, roles will disappear and others will evolve. Some organisations will need fewer people, but others will need more. There will be a rebalancing of human capital as organisations adjust.

Exceptional skills and leadership will be needed, and yet 77% of CEOs say they see the availability of key skills as the biggest business threat. Todays in demand skills are exclusively human capabilities – adaptability, problem solving, creativity and leadership. Software cannot imitate passion, character or collaborative spirit. By marrying these skills with technology, innovation can thrive and organisations can succeed in competitive market places.

CEOs have an enormous challenge ahead of them; it is the role of business leaders to protect and nurture their people to show that in the technological age, humans are their priority.

Our new report – The talent challenge: Harnessing the power of human skills in the machine age – looks at the dilemmas facing CEOs and their HR teams in today’s environment and how their businesses can stay ahead.

Download the full report here.



Hans Geene
+41 58 792 9124

Charles Donkor
+41 58 792 4554

Revision of taxation at source passed

On 15 December 2016 Parliament accepted the revision of the rules on the taxation at source of employment income and passed the final wording of the law. From what we know at present, a realistic assumption is that the law will enter into force on 1 January 2020. The revision became necessary after a number of Federal Court decisions revealed that the existing rules had shortcomings and contradicted the freedom of movement with the EU.

The uniform procedure for subsequent ordinary assessments foreseen in the revised law will close the gap between individuals subject to tax at source and those subject to ordinary taxation, and make them more comparable. The revision involves corrections rather than fundamental changes to taxation at source. However, it does leave gaps and a lack of clarity on certain points. Many of the provisions still have to be defined in detail by the FTA and the cantons. This shows just how complex the matter is, but at the same time creates an opportunity to govern taxation at source more precisely and clarify the situation regarding taxpayers and parties liable for remitting the tax. It will be easier to adapt the upcoming implementing ordinances and circulars to take account of the relevant social developments. It is to be hoped that the authorities responsible will also continue to use these ordinances and circulars as an opportunity to modernise taxation at source. The first drafts are likely to be available from mid- 2017.

Read more here.

Update: New confirmations required for 2016 taxation of German cross-border commuters’ pensions

Following a ruling by the German Federal Supreme Finance Court in Karlsruhe at the end of July last year, Germans who commute to Switzerland for work are about to see a change in the way their pensions are taxed. The law governing taxation of contributions and benefits from mandatory occupational benefit schemes in Switzerland (BVG, often simply referred to as pension funds) is to be amended. This will particularly affect employees with an extra-mandatory pension cover. The changes will enter into force for the 2016 fiscal year. Those affected will need a new confirmation to be able to declare their income tax correctly.

Germans commuting to work in Switzerland are basically covered by the BVG if they are subject to mandatory federal old-age and survivors’ insurance (AHV/AVS) and meet the age and pay requirements for admission to a BVG benefits scheme. So far the German tax authorities have not required any special certification or confirmation from the Swiss pension fund. It’s quite a different matter when it comes to child allowances, daily sickness benefits insurance contributions and other areas.

Read more…

P&O global research: ‘The Ethics of Incentives’

PwC is working with Professor Alexander Pepper and Dr Susanne Burri of The London School of Economics on a ground-breaking global study into the ethics of incentives and the fair distribution of income in society.

As a senior business leader, we would very much value your contribution to this piece of work. Our survey takes a maximum of 20 minutes and includes questions which are designed to investigate the complex views we all have about pay fairness. Please click on the link below:


Please submit the survey by Friday 20th January 2017.

All responses will remain confidential – but there is an option to sign-up for an advance copy of the findings if you so wish.
I hope you will find the time to contribute.

Dr. Robert W. Kuipers
PricewaterhouseCoopers AG
Birchstrasse 160, 8050 Zurich

Phone: +41 58 792 4530

If you have any questions, please write to us at