Swiss pension funds saw funding ratios decline in the first half of 2025 but remain in a solid financial position despite geopolitical and market turbulence.
Private pension funds’ average funding ratio fell to 115.6% at the end of June, down from 117% at year-end 2024 and 121.5% at the end of the first quarter, according to the H1 Pensionskassen-Monitor published by Swisscanto.
The drop followed the US administration’s decision to impose high punitive tariffs on imports on so-called ‘Liberation Day’, which triggered market turmoil.
Fully funded public schemes saw funding ratios slip from 111.7% at the end of last year to 110.3% in H1, while partially funded public funds declined marginally from 89.2% to 88.7%.
Markets recovered quickly after ‘Liberation Day’, helped by the US administration’s temporary suspension of tariffs and steps to de-escalate its trade dispute with China, Swisscanto noted.
The report said Swiss pension funds were largely unaffected by recent market volatility. Asset-weighted average returns were -0.1% in Q2, while H1 performance was marginally positive at 0.1%.
Direct and indirect Swiss real estate investments returned 0.9% in Q2, while Swiss franc-denominated bonds gained 0.8%. Commodities (-12.8%) and unhedged global bonds (-6.0%) recorded the weakest returns.
In H1 as a whole, Swiss equities returned 6.9% and direct and indirect Swiss real estate 2.1%, while commodities and unhedged global bonds fell 7.2% and 5.8%, respectively.
Swisscanto said pension funds’ reserves remain well-filled, but warned that ultra-low or negative interest rates could have far-reaching consequences for liquidity management and asset allocation.
In June, the Swiss National Bank cut its policy rate by 25 basis points to 0%.
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