Return for Swiss pension fund index fails to meet required minimum
SWITZERLAND - The Credit Suisse Pensionskassenindex increased by nearly 2.5 points, or just over 2%, in the third quarter, yet the return failed to meet the legally required minimum rate, according to Credit Suisse.
The Swiss bank calculated a gap of almost 12 points between the BVG minimum return and the index, which has tracked the asset allocation of 100 Swiss pension funds since 2000.
Over the first nine months of 2010, the index returned 1.95%. To bridge the gap by the end of this year, it would have to appreciate by 12%, Credit Suisse said.
Since 2000, the index has increased on average by just over 2% annually, while the legal minimum rate has averaged at around 2.9%.
In its preliminary findings on the Pensionskassenindex, Credit Suisse also noted the funds had reduced their exposure to domestic bonds slightly from 29% to 28.2% while increasing their equity allocation to 28.9% from 27.2%.
Real estate exposure also increased, reaching a record level of 19.9% (from 19.5%).