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IPE special report May 2018

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Swiss Pensionskassen are 'stable' – ASIP

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  • Swiss Pensionskassen are 'stable' – ASIP

SWITZERLAND - The Swiss pensionskassen system is "weathering the storm", says the pension fund association ASIP while the Social Democrats suggest measures to keep it that way.

The average funding level of the pensionskassen is currently at 96.5% and around 60% of all funds in the ASIP study are underfunded, according to the representative body.

By looking at 362 pensionskassen with combined assets of CHF318bn (€212bn), the association calculated private pension funds had an average funding level of 97.8% while public funds the average was at 84.5%.

Figures suggest at least 57% of private funds and 85% of public funds are currently underfunded.

Around 60% of the assets are managed on behalf of active members and 40% are managed for pensioners.

"The buffers built up between 2003 and 2006 are gone," noted ASIP in a statement.

Many pensionskassen are expecting to take measures this year to get back to a 100%-funding level, largely by withholding indexation this year and perhaps making it retrospective to last year.

However, ASIP has warned pension scheme managers must "keep a sense of proportion" with a long-term view, when it comes to remedial actions.

The Social Democrats (SP) have meanwhile confirmed they are supporting an upcoming referendum against further cuts in the conversion rate. (See earlier IPE-story: Front against conversion rate cut grows)

The party has also suggested the financial burden on pension fund members be decreased during the course of the crisis.

It has demanded a stop to higher member contributions in pensionskassen "where an asset recovery is likely".

The SP claimed subtracting more of people's wages would be unwise at a point in time when people's purchasing power needs to be strengthened rather than weakened.

Furthermore, the party is working on a motion calling for stricter investment regulations for pensionskassen though details have yet to be disclosed.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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