Swiss pension fund AHV cashflow positive after increase in contributions
SWITZERLAND - Contributions to Switzerland's first-pillar pension fund AHV rose by 3% year on year in 2011, with the scheme becoming cashflow positive for the first time in several years.
The fund, split into three separate entities with distinct risk profiles last year, recently reported an overall return of 1.2%, with fixed income returns balancing out a volatile equity market.
AHV, the CHF21.3bn (€17.7bn) social security fund, saw contributions from employee and employers increase by more than CHF1m to CHF38.3m, with the invalidity fund IV and EO, covering maternity leave payments, also seeing comparable increases.
As a result, inflows for the first time in several years exceeded benefit payments by nearly CHF400m.
IV, meanwhile, saw assets under management rise thanks to a CHF5bn one-off transfer from AHV, while outstanding value-added tax of CHF300m was not due for payment until the beginning of January and therefore not taken into account in the reporting period.
According to Swisscanto's Pensionskassen-Monitor, the average Swiss scheme only reported returns of 0.1% in 2011, with AHV and more recently Publica outperforming the index, with the country's largest pension fund returning 1.7%.