SWITZERLAND - Publica, the CHF33bn (€20.35bn) pension fund for federal employees saw a return on its investments of 1.3% in 2007, but this is not enough to maintain its 2006 cover ratio.

To keep its cover ratio stable, Publica said it has unlocked fluctuation reserves worth CHF635m - a move which the Swiss Federal government gave its approval to yesterday.

The fund, which will switch from defined benefit to defined contribution in July this year, said its cover ratio dropped from 108.8% in 2006 to 106.7% at the end of last year.

Moreover, the fund will liquidate liability reserves worth CHF103.7m.

The 1.3% return - equivalent to an asset increase of CHF387m - is in contrast to its 2005 performance of 9.9% and 4.5% in 2006.

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