Profond, the Swiss pension fund for small and mid-sized firms, has fully recovered in 2023, recording a 4.6% return and a funding ratio of 107%, according to a report.
The scheme was able to achieve a positive performance in 2023 despite major fluctuations in equity and bond markets, it added.
The pension fund improved its performance in the last month of the year, from 2.3% in November, with a funding ratio that stood at 106%, it said. In 2022, returns plunged to -8.2%, and the funding ratio stood at 104.4%.
The pension scheme is applying an interest rate on retirement savings of its members of 2.5%, the report added. Since its inception in 1991, Profond has recorded average annual returns of 4.9%, and has paid an average interest rate on pension savings of 4%.
The fund has traditionally invested the largest amount of assets in equities, alongside real estate, bonds, alternatives and cash, it said.
Profound has also changed rules of pension plans this year in a bid to improve the benefits for its members and survivors. From this year survivors of members who died in the first three years of receiving a pension will receive a “death benefit”.
In this case, pensions and entitlements of spouses and partners are taken into account, but not the children’s pension. Survivors of a disabled member receive the death benefit in addition to other benefits.
Finally, a lump-sum death benefit will be paid to survivors of members that worked beyond the retirement age set by law.
Profond is one of the largest collective foundations in Switzerland. It has more than 63,000 members and assets under management of around CHF10.8bn (€11.6bn).