SWITZERLAND - Pensionskasse Post, a CHF12.2bn (€7.7bn) pension fund for Swiss postal employees, says it has appointed Francoise Bruderer as its new managing director, effective from January 1.

Bruderer replaces Walter Kohler, who stepped down in early May over differences with other fund executives on future strategy. She is currently the MD of BLVK, a pension fund that insures teachers and other civil servants in the Swiss capital of Berne.

Pensionskasse Post said that "interim management" would continue to steer the fund until Bruderer takes over.

"In Bruderer, an economist and a lawyer, the fund's supervisory board has found an experienced professional for the challenging position," Pensionskasse Post noted.

The scheme added that since taking the helm at BLVK in mid-2003, Bruderer had managed to stabilise that fund. Earlier this century, the BLVK had a funding deficit that amounted to CHF1bn.

The deficit at the public fund was caused by a disastrous investment strategy, which entailed overexposure to equities prior to the equity market crash that began in March 2000. Last year, a special parliamentary committee investigating the BLVK placed most of the blame for the strategy on Hans-Peter Sieber, a predecessor to Bruderer at the fund.

While BLVK under Bruderer has closed the deficit, it is still underfunded. At the end of 2005, its coverage ratio was 86.39%, up from 79.8% the previous year. The improvement was due to a return of 10% on assets for the year.

The Swiss government privatised Pensionskasse Post in 2002 but, from an actuarial standpoint, did not fully capitalise it. As a result, the government plans to provide it with another CHF800m, which is to come from profits earned by Switzerland's still state-owned postal service.

With 70,000 employees covered, Pensionskasse Post is one of Switzerland's biggest schemes. It finished 2005 with a return of 11.1% - in line with the industry average and a coverage ratio of 100%.