SWITZERLAND - Publica, the Swiss pension fund for federal employees, saw its CHF32.5bn (€20.5bn) assets decline by almost 5% the first half of this year, forcing the scheme to tap further into its reserves.

The fund, which had to publish its results over the first half following its switch from defined benefit to defined contribution on July 1, said it saw a negative return of -4.56% in the first half, dropping below its benchmark by 0.41%.

To keeps its cover ratio stable, Publica said it had unlocked the remaining CHF2bn of its fluctuation reserves.

In May this year, the fund had already said its 1.3% return for 2007 was not enough to maintain its 2006 cover ratio, feeding the fund with CHF635m from its reserves. (See earlier IPE story: ‘Publica dips into reserves to maintain cover ratio')

Publica, which invests 22% of its assets in equities, said that even after the move it saw its cover ratio drop further from 106.5% at the end of last year to 99.5% at the end of June.

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