Swiss pension funds are building up reserves to protect against market volatility expected to continue this year.
Fluctuation reserves, a risk management tool for pension institutions, are designed to absorb temporary losses in financial markets and maintain financial stability during challenging market phases.
Pension funds strengthened their fluctuation reserves in 2025, despite high interest rates on pension savings, primarily on the back of positive investment returns, Stephan Skaanes, PPCmetrics’s chief executive officer, told IPE.
The trend continued into 2026, with technical funding ratios rising to approximately 122.4% on average by the end of August, up from 121.1% at the end of 2025. The increase was supported by sustained positive investment returns across most asset classes.
“Consequently, pension funds were able to further increase their existing reserves, or bring them closer to their target levels,” Skaanes added.
The target value of fluctuation reserves averaged 17.7% in 2025, broadly stable compared with an average of approximately 17.6% and a median of 17.0% in 2024.
Public pension funds set a lower average target for fluctuation reserves, at 17.1% of their total CHF230bn (€291bn) in assets, while private pension funds targeted 17.8% of their CHF618bn in assets, according to PPCmetrics’ annual Pensionskassen-Jahrbuch report.
PPCmetrics analysed 350 pension funds in the report – 294 private and 56 public – with more than CHF1trn in total assets.
Persistent volatility
Target levels for fluctuation reserves are determined based on several parameters, including investment strategy and return and risk expectations.
PPCmetrics expects average target fluctuation reserve ratios this year to remain largely stable, or perhaps rise slightly, compared with the end of 2025.
“From today’s perspective, markets are expected to remain volatile in the future, driven by factors such as persistent geopolitical uncertainties, regional conflicts, and the persistent high public debt levels of numerous industrialised nations,” Skaanes noted.
Fluctuation reserves remain a key tool for navigating these challenges, allowing pension funds to absorb temporary market losses without having to immediately adjust their long-term investment strategies.
“Current funding ratios – which are high by historical standards – provide a sound foundation for managing potential future market turbulence,” Skaanes said.
