SWITZERLAND - The Swiss pensionskasse for the canton of Aargau returned 1.5% in the first four months of 2009 while the scheme for Solothurn has just reported a 14.8% loss for 2008.
APK, the CHF7bn (€4.6bn) public pension fund, introduced currency management as a separate asset class at the beginning of the year after suffering a 16% loss in 2008 and seeing its funding level fall to 92.9% albeit there was no shortage of liquidity.
This latest asset allocation change follows moves in October last year to ensure the fund, "together with an external adviser", reduces its risk by lowering the exposure to hedge funds, foreign currencies and long/short equities. (See earlier IPE-story: APK moves into hedge fund of funds)
"The new asset class long/short equities has not shown any advantage over the classic long-only equities and the investment results are disappointing," noted APK, adding it will not continue to invest in this asset class.
Meanwhile, the pensionskasse for the north-Swiss canton of Solothurn reported a -14.8% return for 2008.
It noted the Swiss Pictet index showed an average return of -11.5% for pensionskassen with a 25% equity exposure and -20.1% for those with 40% in equities.
The CHF2bn pension fund has around 34% in equities and saw its funding level drop from 79.3% to 65.2% over the last year.
Nevertheless, the pensionskasse stressed it will neither have to cut pensions nor increase contributions and even promised to link pension pay-outs to inflation despite the financial crisis.
The best performing asset class in the fund's portfolio was Swiss real estate with +5.4% and Swiss bonds with +5.5%.
On the other hand, investments in Swiss equities lost 34.9% and foreign equities fell 44.7%.
Elsewhere, Swiss insurer Axa Winterthur has set up a Pension consultancy, Axa Pension Solutions, which will offer advise on asset management, asset allocation, risk management, risk hedging, administrative services as well as IT solutions, governance, compliance and regulatory advise to Swiss pensionskassen.