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Row over Swiss funding levels

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  • Row over Swiss funding levels

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SWITZERLAND - Many pension funds are back to full funding after a significant market recovery in the first half of 2009 but Swiss experts say widely differing calculations on average 2008 funding levels have left them confused as to what pension funds' true funding levels are.

A conference of the Swiss regional supervisory authorities published figures earlier this week which stated among 3,200 pension schemes only 30% had been underfunded and only 8.2% had a funding level below 90% - the level at which recovery measures are legally binding.

In contrast, Swiss asset manager Swisscanto surveyed almost 300 pension funds (made up mainly of large schemes representing 60% of pension assets) and calculated the underfunding rate was over 60% at the end of 2008.

Similarly, the Swiss consultancy Complementa calculated an average pension funding level for year-end 2008 of 96.7% from a sample of over 430 pensionskassen which combining 70% of assets and 60% of members of Swiss pensionskassen.

According to the consultancy's risk check-up, 60% of schemes had been underfunded, a large part of which, however, were not under the 90%-mark.

Differences in the calculations are said to stem from differences in the sample and the fact that Swisscanto, as well as Complementa, are weighing their findings according to pension fund size.

Nevertheless, critics have accused the two institutions of "creating panic" and "exaggerating".

A sample from three north-Swiss regions published in August had also painted a brighter picture of the funding situation. (See earlier IPE article: Swiss pension figures brighten funding picture)

However, Gérard Fischer, ceo of Swisscanto, said it was not clear to him where the figure of 3,200 pensionskassen as offered by the regional supervisors stems from.

He quoted figures of the official statistics department which showed just over 2,500 autonomous and semi-autonomous pensionskassen in Switzerlandm which have liabilities in contrast to fully-insured schemes.

"Maybe several portfolios managed by one fund were counted as different pensionskassen," Fischer speculated.

But he noted there will be talks between the supervisors and Swisscanto on the subject of which samples were used.

In the meantime, the Complementa risk check-up claimed there has been a significant recovery of all of the over 430 schemes surveyed, as the average funding level had rised to 101.8% by the end of August. (See earlier IPE story: Swisscanto sees easing of funding crisis)

This means that while over 83% of all members of the surveyed pensionskassen were affected by underfunding by the end of 2008, only 52% still have issues and the number of underfunded schemes has fallen to 38%.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email

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