SWITZERLAND - The exodus from the heavily-underfunded Ascoop transport pension fund is continuing as the Auto AG Schwyz is joining the small collective fund Alvoso.
While the bus company Auto AG Schwyz is only a small firm with 100 pension fund members, its decision to leave Ascoop is the continuation of a trend which started during the financial crisis. (See earlier IPE story: Ten confirmed to join Swiss Ascoop fund)
The Auto AG Schwyz - which said in its 2008 annual report it had been "dragged down with the Ascoop not out of its own fault" - now faces a deficit of close to CHF3.8m (€2.6m) and a 70% funding level in its pension fund.
In contrast, Alvoso maintained a funding level of 101% to the end of 2008 despite a negative performance on investments of -8.5%. This was well under the Swiss average of -13%.
The collective pension fund invests more than 50% of its assets in domestic bonds along with 14% in equities, 11% in real estate, 5% each in foreign bonds and alternatives, and the rest in liquid assets.
The Auto AG Schwyz scheme will continue the recovery measures put in place last year once it moves to the new fund, which include additional contributions both from employees and employer as well as a sale of subsidiaries.
The public transport company has also managed to ensure that payments from the federal government and cantons for the running of bus services - some of which go into the pension fund - remain at a similar level over the next years, despite the Auto AG Schwyz having cut its costs and provide cheaper services.
All of these measures should ensure the Auto AG Schwyz pension fund gets back to full funding level by 2020 at the latest, the company said in a statement.
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