The CHF17.3bn (€18.8bn) pension fund of the now defunct Swiss bank Credit Suisse – Pensionskasse Credit Suisse – has de-risked its investment portfolio in anticipation of structural cash outflows, as it moves to align its pension arrangements with those of UBS – the rival bank that acquired Credit Suisse in 2023.
The Credit Suisse fund has reduced its exposure to highly liquid assets with higher risk-return profiles, with equities cut by 4%. Further adjustments are expected as its risk profile continues to decline, according to the scheme’s 2025 financial report.
The strategic asset allocation was revised twice over the past year to reflect anticipated extraordinary cash outflows and a long-term reduction in risk-bearing capacity, the report said.
The changes mark a shift towards a more permanent environment of structural cash outflows, prompting a realignment of the investment process, it added.
The investment strategy is consistently geared towards robust operational implementation, high liquidity, and the ability to meet all obligations at all times, according to the report.
Credit Suisse pension fund told IPE in a statement that it refrains from commenting on specific investment decisions or individual portfolio adjustments, as a matter of principle.
“The principles governing our investment activities, as well as our investment process, are set out in our Regulations on investments, which are available on the website,” the statement added.
Despite reduced risk capacity and a lower allocation to equities, Pensionskasse Credit Suisse returned 3% net last year, compared with a 4.5% return on the strategic asset allocation, according to the financial report.
The 1.5 percentage point shortfall versus the benchmark was mainly driven by the valuation of private market investments using liquid benchmarks, the scheme said.
Merger question
A source close to both Credit Suisse and UBS told IPE that no decision has yet been made on a possible future merger of both Swiss banks’ pension funds following the 2023 deal.
Meanwhile, Credit Suisse is aligning its pension arrangements with those of UBS, closing 1e pension plans for higher-earning members and reshaping its management team, including the appointment of chief executive officer Daniel Hunziker.
In the editorial introduction to the 2025 financial report, Hunziker said that an intensive and careful assessment was underway to determine whether and in what form the two pension funds could be merged.
New UBS employees join the UBS pension fund, while no new members enter the Credit Suisse pension fund, IPE has learnt.
A closed pension fund experiences persistently negative cash flow, which can make it cheaper to finance when in surplus due to a “concentration effect”, but also increases the risk of becoming expensive in the event of underfunding, another source told IPE.
Maintaining two parallel pension funds – particularly where one is closed – does not make sense for an employer in the long term, the source added.
A closer alignment between the two schemes will depend on market conditions. In the majority of scenarios, an integration does take place, the source said.
While the Credit Suisse pension fund carries lower investment risk and therefore lower expected returns, it faces a “concentration effect” linked to its negative cash flow, the source explained.
