The funding ratios of Swiss private pension funds have been trimmed from 124.6% at the end of 2021 to 119.7% in Q1 of 2022 due to losses across practically all asset classes, according to the Pensionskassen-Monitor published by Swisscanto.
The funding ratio of private pension funds is however on par with the level recorded at the end of the same quarter last year (119.9%). The funding ratio of fully funded public pension schemes has deteriorated to 112% in Q1 this year from 115.3% at the end of last year, again below the average target for fluctuation reserves.
The share of fully funded public pension funds with a funding ratio of at least 115% has fallen by around 25 percentage points to 50% since the last quarter, according to the study.
The funding ratio at partially funded public pension funds also went down quarter-on-quarter, from 94.4% at the end of last year to 90.4% in the first quarter of this year.
In contrast, several other Swiss pension funds have reported record high funding ratios. PK SBB, the pension fund for Swiss federal railways, has continued to progress reaching a record high of 112.4% in 2021, from 108.5% in 2020.
The Swiss pension funds recorded negative returns of -3.54% in Q1, only commodities posting positive returns of 26.79%. Swiss bonds returned -6.06%, foreign bonds -5.22%, bonds hedged in Swiss francs -5.28%, Swiss equities -5.51%, foreign equities -4.21%, direct and indirect Swiss real estate -1.65%, and hedge funds -1.63%, according to Swisscanto.
The Swisscanto Pensionskassen-Monitor is based on the data from the Swisscanto pension funds study carried out by the Zürcher Kantonalbank. The study analysed data from 514 pension funds with total assets of CHF777bn (€756bn) as of 31 December 2020 (Swisscanto Pensionskasssen study 2021).
The estimates are based on market developments and the investment strategy chosen by the pension funds at the beginning of 2021.