The Swiss electricity suppliers' pension fund PKE has gone on to the internet. What has been an everyday occurrence for thousands of companies has now become a reality too for pension funds. Whether or not PKE is actually the first, it is certainly a pioneer among pension funds in taking such a step with this new communications tool.

By tapping in http//www. pke. ch, you can access the home page containing general information about PKE and links to more specific pages. These include the services available to the 16,000 members covered by the scheme, for example, how they can obtain mortgages from the pension fund. PKE also lists on the site the apartments it owns that are available.

Technically, it would would be easy to provide through the internet pages details of the individual accounts of members. But this was not the main objective of the internet exercise. From the outset, the focus was on the portfolio management area. PKE discloses interesting details of its Sfr5bn($3. 6bn) assets. This includes the portfolio strategy, asset allocation, a complete list of equity holdings and the risk adjusted performance.

Fund manager Franz Winkler handles most of the equity portfolio, though some mandates, for areas such as emerging markets or non-domestic small caps, are outsourced to external advisers, such as Flemings, Robeco Bank and Lombard Odier. All managers' individual performances are published on the internet as well. Some managers, used to working in private, have not been eager to have their achievements for PKE published in detail. Winkler smiles when talking of their reactions when they first heard that they would be ranked publicly by a major client.

But that's just what he wanted to obtain- more transparency in performance, in order to get more competition between the banks and more contacts from others. Any manager can now call him and offer better or cheaper deals. This, of course, is something that they could do in the past, but the internet offers easy access to everybody everywhere.

In the future, PKE will publish its upcoming projects, such as the building up of venture capital investments, or other specialised asset classes. For such projects, the internet can be regarded as providing a free marketplace for the pension fund. This approach fits in with the general information policy of PKE, which has up to now been open minded, with everyone being able to get practically any information they wanted. So for this fund, the internet is just a new path and not a new direction or a new business culture. Otherwise, the whole exercise would not work. Expecting good offers without providing valid information is not a convincing approach.

PKE had to invest about Sfr10,000 in the internet development, mainly in software and technical support. The running costs should not exceed Sfr4,000 annually. For the monthly updates, Winkler has reckoned on just a half an hour of his own time. Altogether, he believes the internet is a cheap investment compared to the benefits of the information. PKE wouldn't do it otherwise, as it has the reputation of being a somewhat miserly rather than lavish institution.

In the first two weeks, the PKE site received 180 visitors, mainly members looking for the performance after the turmoil in the financial markets in the Far East. For the same reason, the listing of stocks was also hit. That his investment tactics maybe copied for free does not bother Winkler at all.

PKE, the Pensionskasse der Schweizer Elektrizitatswerke, is one of Switzerland's major schemes, which serves around 145 different local electricity producers and suppliers. But the internet is not its only innovation, as one of its main achievements to date has been to introduce an asset allocation for equities completely based on economic sectors rather than on markets or currencies. With this approach, PKE has had a remarkable return of 20.8% on average per annum in the period 1992 to 1996. It has out performed the MSCI by almost 9% pa with a lower volatility than the benchmark. In weak stock markets, the sector-based approach produces lower losses.

As a result, Pke has just decided to reduce the members' and employers' contributions by a third, without affecting the income or lowering reserves. The total of liabilities is covered 132% by the assets. "We do not need more than this," says Winkler.

Eric Solenthaler is editor of Finanz & Wirtschaft in Zurich