Swiss public pension funds have recorded their highest funding ratios in more than two decades, buoyed by strong investment returns, according to Swisscanto.
The funding ratios of fully and partially funded Swiss public pension funds reached 115.7% and 92.4%, respectively, in January – the highest level in 25 years – according to the latest Pensionskasse-Monitor study.
Capital-weighted funding ratios of private pension funds also edged higher, rising to 120.9% in January from 120.6% at the end of 2025, marking the strongest level since 2022.
The improvement strengthens the position of pension funds resisting what they view as low interest rates on pension savings set by occupational pension supervisor OAK BV.
Swisscanto said the increase in funding ratios was driven mainly by commodities, which delivered the strongest performance among asset classes at 10.7% year-to-date, despite a correction at the end of January. This followed a 44.1% return for commodities in 2025.
The concentrated Swiss equity market generated returns of 16.4% for pension funds last year, while global equities returned 9.3%, the study shows.
Gold also played a role. It had an “above average” impact of 1.6% on the performance of Publica, following a price increase of 48.1%, the pension fund said in a statement commenting on its 2025 results.
The CHF43bn (€47bn) public pension fund generated a return of 6.6% in 2025. Equities, with an annual return of 13.5%, made the largest positive contribution, adding 4.1% to overall performance. Swiss equities returned 18.5% and emerging market equities 15.75%, while US equities lagged with returns of 5.1%, Publica said.
The funding ratio across Publica’s open pension plans – which account for the largest share of its assets and are open to beneficiaries and active members – stood at 107.8% at the end of 2025.
BVK, the CHF45.8bn pension fund for employees of the canton of Zurich, closed 2025 with a funding ratio of 113.6%, up from 109.3% a year earlier. The improvement followed investment returns of 6.2%, below the 8.1% recorded in 2024.
Foreign currency hedging, alongside real estate and equities, had a particularly positive impact on BVK’s assets.
More broadly, some pension funds have reinforced hedging strategies amid ongoing geopolitical risk, with around 17% of assets still held in unhedged foreign currency investments.
Migros Pensionskasse, the CHF30.2bn pension fund for Swiss retailer Migros, hedges 90-100% of its foreign currency exposure in bonds and real estate, and around 50% of its equity exposure.
The fund returned 6.5% year-to-date, while its funding ratio rose to 135.8% in 2025 from 132.8% in 2024.
Swisscanto also revised up the cumulative net return of pension funds for 2025 to 5.5% from 5.3%, on an equally weighted basis.
