Swiss pension reaches full funding

SWITZERLAND - The CHF1.66bn (€1bn) pension fund of the Schaffhausen canton has reached a funding level of 100.21%.

Asset value of the Pensionskasse of the canton in the north of Switzerland has increased 5% to year-end 2006 from CHF1.58bn in 2005.

Starting almost five years ago with a funding level of just over 90%, the pension fund introduced several measures intended to bring the scheme to a full funding level within 10 years.

Members of the pension fund have been paying extra contributions since 2005 so this currently means a 1% increase in employees' contribution while employers are paying 1.5% more.

The Pensionskasse ceased to link pension benefits paid out to inflation in 2003.

Asset allocation has virtually remained the same over the last five years as nearly 50% is invested in bonds, just over 20% is in equities (half of them domestic) and around 15% in - mostly direct - property.

"To be prepared for collapses in the market we will need reserves," the fund said in its annual report. "We are aiming for a 115% funding level."

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