SWITZERLAND – Switzerland's new pensions regulator has published its report on funding at Swiss schemes while confirming plans to change its methodology in order to make future funding data more comparable.
The Oberaufsichtskommission's official statistics cover all Swiss retirement vehicles, including those for contributions paid beyond the mandatory level required in the second pillar, bringing the total number of funds to more than 40,000.
According to the regulator's report, in 2011, 17% of those funds were underfunded compared with 10.9% the year previous.
In total, the second pillar will require CHF41.5bn (€34.2bn) to achieve full funding levels with public pension funds, with the state guarantee accounting for the largest share at CHF31.1bn.
Of those Pensionskassen with less than 100% funding, one-fifth did not have a state guarantee, which allows some public pension funds to remain underfunded.
The regulator predicted that the funding situation in the second pillar would improve this year, as 2012 had been "much better for investments".
However, due to extremely low interest rates worldwide, it will become "more and more difficult in the coming years to achieve the returns necessary to stabilise the funding level", it said.
Meanwhile, the regulator conceded that its current method of calculating the funding level offered "only limited information".
Starting with the year-end figures for 2012, it will include the discount rate (technischer Zins) used by the Pensionskassen, as well as unspecified "other figures".
The discount rate, for which there is only an official recommendation, is directly linked to the level of liabilities calculated.
Similar to the regulator's plans, Swiss consultancies such as PPCmetrics have already created so-called 'risk-based funding levels' to make funding more comparable.