Credit Suisse pension fund tweaks parameters, beats market return

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The CHF14bn (€11.4bn) pension fund for Swiss bank Credit Suisse has reported a return of more than 1.6% for 2015, well above the market average of just under 1%.

As per December 2015, the Credit Suisse Pensionskasse’s funding level stood at 110%.

To ensure the sustainability of its funding, the scheme adjusted its technical parameters from 2016, as many other funds have done over the past year.

The discount rate, or technischer Zins, applied to active members’ liabilities was reduced from 3% to 2%.

Additionally, the fund switched from periodic to generation tables to calculate longevity risk.

The Credit Suisse Pensionskasse also announced plans to introduce individual investment choices for pension fund members with contributions above a certain threshold.

Under these so-called 1e-plans, named after the relevant paragraph in the BVV2 investment regulations, pension funds can introduce up to three different risk profiles for people with higher income.

However, Martin Wagner, managing director at the Credit Suisse Pensionskasse, said at a recent conference in Zurich that it was a “shame we are only allowed to offer three different choices”.

He added: “People want to individualise themselves and their financial matters”.

Also speaking at the conference, organised by supervisor BVS, Willi Thurnherr, chief executive at Aon Hewitt in Switzerland, said 1e legislation was still under review and in need of a number of amendments. 

The government, he said, has yet to define the “risk-free investments” to be used in at least one of the choices.

Thurnherr said these individual choices for members could “help ease the burden on companies’ balance sheets”, but he warned they might also be “the beginning of the end of guarantees for members”.

He said this was “certainly not where we want to get to” in Switzerland. 

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