SWITZERLAND - The CHF859.6m (€602.3m) Swiss "Sicherheitsfonds", the fund for insolvency protection of Pensionskassen, reported the lowest pay-out for 15 years in 2009 as it adjusted its asset allocation.
In total the fund paid out CHF24m last year, which is CHF45m below the payouts made in 2008, and CHF6.4m was repaid to the fund from closed insolvency cases.
The fund, which takes on pensions liabilities if the employer becomes insolvent but also makes support payments to very mature funds, dealt with 1360 cases last year compared to 2467 cases the previous year.
However, in its annual report the "Sicherheitsfonds" pointed out the low number of applications was also down to the fact that the default fund was restructuring last year and applied for fewer payments than in other years. (See earlier IPE article: Swiss default fund restructures admin)
"For the following years clearly a higher payout has to be expected," the fund noted.
The largest payment was made to the textile company Ritex with CHF4m last year and in total the payments from the "Sicherheitsfonds" to the company add up to CHF22m over recent years.
Because of the good financial situation of the guarantee fund the contributions were left the same for 2010 as they were from 2007-2010 which is 0.07% for the insolvency protection and 0.02% for protection for mature funds.
As for its investments the guarantee fund mostly stuck to its previous asset allocation with 55% bonds, 25% equities, 15% real estate and the rest in liquidity. However, in its December session the fund decided to reduce domestic bonds by 5% and increase foreign equities by the same amount.
All investments are managed passively or close to the index and direct real estate or investments in convertible bonds is not permitted.