Precious metals and equities have propelled the returns of open and closed pension plans at Publica, one of Switzerland’s largest schemes, to 5.9% net in 2024, after costs and taxes, on a currency-hedged basis, the scheme said.
Investments in equities had the biggest positive impact on Publica’s consolidated total assets under management, recording a net annual return last year of 14.5%.
Equities contributed with returns of 4.7% out of 5.9% total net returns, with stocks in North America returning 24%, and emerging market equities 13%, while stocks in Switzerland and in Europe returned just under 7% and 10%, respectively, in 2024, the scheme disclosed.
Publica has been increasing investments in equities and precious metals – gold and silver – as part of a four-year strategic plan. Precious metals were among the best-performing asset classes in Publica’s portfolio last year, returning 33%, while bonds returned only 1%, it added.
Swiss bonds returned 5%, followed by emerging market government bonds in local currencies at just over 2%, and foreign corporate bonds at just under 1%. Emerging market government bonds in US dollars ended 2024 at just under -6%, the worst-performing asset within Publica’s bonds portfolio.
Directly held Swiss property slightly increased in value last year returning just under 5%, while foreign real estate funds suffered another devaluation with rising interest rates in many industrialised countries, returning -6.5%, the scheme said.
Overall, returns improved last year from 2023, when the pension scheme recorded a consolidated net investment return for its open and closed pension plans of 3.85% on a currency-hedged basis, after costs and taxes.
Last year, closed pension plans, whose members are only retirees, achieved a 4.3% return, while open pension plans, whose members are both employed and retirees, returned 6%, it added. Asset management costs amounted to 0.3 percentage points.
The consolidated funding ratio across all pension plans stood at 104.6% at the end of 2024.
Positive returns have improved the consolidated funding ratio of the open pension plans, which stood at 104.3%. This means that now none of Publica’s open pension plans are underfunded, while last year three plans were underfunded, Publica said.
The funding ratio of the closed pension fund stood at 110.1% in 2024, it added.
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