Funding-level improvements grind to halt at Swiss schemes
SWITZERLAND - The funding level of Swiss pension funds has remained unchanged in the second quarter of 2012, according to asset manager Swisscanto.
This means that the improvements in funding levels seen in the first quarter have ground to a halt.
According to Swisscanto's Pensionskassen-Monitor survey, the average funding level for private pension funds remained at 104.8%.
For public pension funds with full capitalisation, the level stayed at 96.7%.
Both sets of pension funds need to build up reserves and aim for a funding level of more than 100%.
However, public pension funds with a guarantee provided by the state are allowed a partial capitalisation of 80% - their average funding level stood at 72.8% at the end of June.
One-fifth of all Swiss private pension funds are thought to be underfunded compared with 67% of their public counterparts.
At the end of 2011, the average funding level for private pension funds had stood at 102.8%, compared with 88.6% for public pension funds and 97.1% for all pension funds.
All pension funds combined have generated an average return of 2.8% since the beginning of the year.
A higher return of 3-3.5% was generated by just under a fourth - 23.1% - of all pension funds, while 6.9% reported a return of 3.5-4%.
A fifth of all pension funds produced a return of 2-2.5%, while 2.8% of all pension funds generated 1.5-2%.
The end-of-June estimates are based on data provided by 340 pension institutions with CHF437bn (€364bn) in assets under management as of 31 December 2011, as well as their selected investment strategies and market developments.