SWITZERLAND - Swiss Pensionskassen have now returned virtually nothing from their investments in the last eight years, Swisscanto found in its latest research.

The average performance of the 272 pensionskassen surveyed by the Swiss consultancy was 2% over five years.

However, that fell to just over zero (0%) over an eight-year period, said the firm, when figures incorporate both the 2008 and the 2001/02 financial crises.

Despite returning almost nothing during that time, Swiss pension funds were still required  guarantee a minimum rate between 2.25% and 3% annually over the whole period, and pensionskassen are aiming to generate a return of at least 4% over the long-term.

Over 30% of pensionskassen have conducted an asset liability study since 2007 in order to improve their asset allocation, whereas in 2006 just 16% had produced a similar study and the total had been less than 10% prior to that.

That said, the long-term view of the funds' asset allocation shows equity and bond exposure remained more or less at similar levels

Equity investments made up 25.5% of the collective portfolio in 2003 while four years later the figure stood at 29.3%, before dropping to 23.1% over 2008.

During the same periods, bond exposure increased from 37.5% to 37.8% and ending up at 39.6% in December 2008.

At least 37.9% of pensionskassen saw their equity exposure drop last year under the self-set limits, and 72% did not use rebalancing.

The study also found that 56% of the pensionskassen surveyed have already taken measures to fight underfunding. (See earlier IPE story: Bulk of Swiss schemes now underfunded)

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