Another Tontine Spotted in the Wild?
Swissair’s Tontine Pensioners are flying high
When Swissair went bankrupt in 2001, its current & former employees were at least highly fortunate that it’s pension plan was independent of the operating companies.
This protected the pension assets from airline’s creditors although it also essentially orphaned the plan by removing the sponsor.
The airline had offered pensions to flying staff, ground staff & senior management & the plan was reasonably well funded & even had a surplus.
Swiss regulations and subsequent court orders dictated that the entire plan —including the surplus — be administered for the benefit of plan participants.
Thus, the pension would have to continue investing prudently while dutifully paying the benefits to its participants until the last of them dies.
As of 2018 however, the plan was reported to have a surplus of 24% meaning that if plan administrators maintained the defined benefit payout rates then the last surviving participant could likely receive a payout of 400m Swiss Francs (US$423m).
However, rather than awarding the surplus to a last-survivor-takes-all lottery winner, the pension administrators decided that a fairer solution would be to operate in a manner consistent with a traditional Tontine pension.
That is, rather than retaining the surplus, the plan spreads the surplus across all of the pensioners over time, gradually raising all of their payouts throughout retirement & thereby ensuring that everyone wins.
As a result of this decision, the pensioners are now enjoying what has been described as The Golden Retirement of Swissair Employees with retirees receiving bonus payouts of 7,050 CHF (US$7,600) in 2016 which more than doubled to 16,450 CHF (US$17,750) in 2017.
It is perhaps no wonder that the former Swissair employees hold their annual gatherings in exclusive ski resorts in the beautiful Swiss mountains, enjoying their retirement together with far less worries about the future than so many other retirees. This is how retirement should be.
About Tontine Trust
TontineTrust is a Fintech that since 2017 has been undertaking research & development to deliver a platform that enables the perfect retirement product.
Our platform enables low-fee lifetime income tontine pensions which increase the equivalent wealth of pensions by 87% with no added risk according to studies by the Swiss Federal Institute of Technology.
More importantly, because tontines are so safe & actuarially robust, they immediately enable retirees to relax & enjoy their retirements without being constantly pre-occupied with the highly justifiable fear that they will outlive their savings or that their pension plan will go bankrupt.
This is possible because our award-winning & globally patent pending robo-actuary system makes real-time adjustments to expected future payouts thereby ensuring that our tontine pensions are ALWAYS fully funded with all of the assets & calculations made fully transparent to ensure absolute trust in the sustainability of the system.
In an era where retirees have to endure negative interest rates and/or high volatility in the equity markets, we are the pioneers of a new longevity risk sharing solution which enables tontine members to “earn a type of guaranteed “alpha” not available in any other asset class” according to the Wall Street Journal’s Marketwatch.
Following the recent introduction of the Pan-European Personal Pension product regulations, we are now preparing to launch our Tontine Trust personal pensions in up to 33 countries by the end of 2021.
Following the launch of our personal tontine pensions, we will then partner with many of the global institutions & governments that have contacted us to enable them to offer Pillar 2/3 tontine pensions on a low-fee basis to their clients & citizens.
Whilst we cannot cure every problem of the massively troubled global pensions industry, we know what consumers want from their pensions & we know how to use technology to deliver that solution in the safest & most cost efficient manner.
For example, our platform can enable troubled Defined Benefit pensions to switch to a simpler & far more sustainable solution that members can easily understand to be absolutely fair & which offers the potential for future payouts to rise substantially over time.
If you interested to help us roll this solution out globally or if you are a fintech investor looking for disruptive impact startups with a globally scalable business model then we would like to talk to you.
To speak to us just drop us an email to: prosper@tontinetrust.com or
Book a meeting: https://calendly.com/dean-mcclelland/30min
For further information see https://tontine.com
Twitter: https://twitter.com/TontineTrust
