SWITZERLAND – SBB, the CHF15bn (€12.3bn) pension fund for Switzerland's federal railways, has said it may adopt a variable pensions model.

At present, Swiss pensioners make no contributions to pension fund recovery measures, and their pensions are guaranteed.

However, some pension funds managing above-mandatory assets have started to introduce variable models, which means that only a basic pension is paid out regularly, and the top-up depends on performance.

The Swiss branch of PwC was one of the earliest adopters of the variable model, while Dieter Stohler, managing director at Publica, the country's largest public pension fund, told IPE last year that his fund was considering similar models.

Markus Hübscher, managing director at SBB, told IPE: "It makes sense to look into these models now, considering the subsidisation of pensioners by active members currently taking place in our Pensionskasse, [which has] quite an old age structure."

Hübscher said the pension fund had not yet decided which model it would use – or for that matter whether it would introduce such a model at all.

In a statement, the fund noted its funding level was currently above 100%. The trustees, however, are still looking to ensure long-term financing.

"A variable pension model would be fairer, as the assets of retirees have a much higher interest than the ones of active members," Hübscher said.

The pension fund is also looking into "other options", including the further reduction of the discount rate (Technischer Zins) and with it the conversion rate.

Hübscher also confirmed the fund was looking to tender a segregated global corporate bond mandate.

At the moment, corporates are only part of a mixed bond mandate, but Hübscher is seeking to build a separate portfolio.