SWITZERLAND - One in five pension funds in the Swiss second pillar were underfunded in 2002, according to figures from the Swiss government.
Statistics collected by the BVG, the federal office for social security, show that 722 of second pillar pension funds, 20% of the total , were underfunded at the end of December 2002. This underfunding totalled 49.7billion Swiss francs (32 billion euros).
Most of these schemes (604) do not have a government guarantee. Only public pension plans operated by the cantons and communes are protected by federal guarantees. Of the unguaranteed schemes, 28.7% were underfunded at the end of 2002, compared with 8.1% at the end of 2001. This underfunding totalled 13.3 billion Swiss francs.
More than 5% of the schemes without guarantees are seriously underfunded – that is, below 90%. This affects 217,000 active scheme members, and 78,000 pensioners.
Life insurers also had a poor year in 2002, according to the BVG. The accumulated losses of the 16 life insurers who provide pensions within the BVG system totalled 2.4 billion Swiss francs, more than 10% of premium income.
The BVG survey is the largest of its kind so far, and includes the country’s smaller pension schemes. The survey by consultants Complementa published in June, which suggested that 45% of Swiss schemes were underfunded, covered schemes with assets of more than 100 million Swiss francs.