Swiss postal profits used to fund pensions
SWITZERLAND - The Swiss postal service plans to transfer 40% of its CHF837m (€517m) in profits for 2006 to Pensionskasse Post, as the government did not fully capitalise the fund when it was launched.
In January 2002, the Swiss government privatised the postal service's pension fund, creating what is today called Pensionskasse Post.
Although funding was provided to Pensionskasse Post between 2002 and 2004, the government underestimated the amount the scheme needed to be fully capitalised.
Citing sources at Pensionskasse Post, IPE reported in May 2006 that Pensionskasse Post needed CHF800m, adding that the money would likely come from profits earned by the government-owned postal service.
After the current transfer is made, Pensionskasse Post's funding requirement will be cut to CHF450m. The scheme is expected to be fully-capitalised by 2009.
Since January, Pensionskasse Post has been steered by Francoise Bruderer, a former managing director of BLVK, an emblattled CHF8.6bn pension fund that insures civil servants in the Swiss capital of Berne.
During her tenure at BLVK, Bruderer managed to stabilise the scheme and reduce a deficit that totalled as much as CHF1bn. The deficit stemmed from overexposure to equities during the crash earlier this decade.
Pensionskasse Post, which has CHF12.2bn in assets, has not yet released its full results for 2006. In early February, it said its return for 2006 was 7.5% - slightly above the 6.9% average for other Swiss schemes.
"This good return was due above all to an excellent performance of our real estate assets (25.3%) and equity holdings (14.9%)," the scheme said.
Pensionskasse Post's bonds ended the year with a 0.39% return while its commodity and hedge fund holdings earned 0.14% each.
On January 31, the scheme had 43.8% allocated to fixed income, including 5% denominated in non-Swiss currency. Equity allocations totalled 28.2%, including 20.5% which were non-Swiss.
Pensionskasse Post also had 14% invested in real estate, 7.1% in alternatives (commodities and hedge funds) and 6.9% in cash.