SWITZERLAND - Swiss public pension funds were slightly underfunded at the end of the second quarter, while private schemes remained somewhat overfunded, according to a new survey by Swiss consultant Complementa.

According to the survey, the average funding ratio for public schemes fell to 97.6% on June 30 from 100.1% on December 31. Moreover, public schemes with a state guarantee against insolvency had a funding ratio of 93.7% on June 30 and those without a ratio of 112.6%.

The funding ratio for private schemes, meanwhile, slipped to 109.1% from 112.5%, the survey showed.

For its survey, Complementa queried 445 pension funds, known as Pensionskassen, which together have CHF353bn (€223bn) in assets.

Complementa's survey comes a month after ASIP, the association for Swiss Pensionskassen, reported that the average return for the schemes fell to -0.3% in the first half due to bullish equity and bond markets.

But equity markets have rebounded in the current quarter. "If you add two to two and a half percentage points to the funding ratios for both the public and private schemes, you would have what we estimate to be the figure for today," Benjamin Brandenberger, chief executive of Complementa, said at a news conference in Zurich yesterday.

Complementa's survey also showed that the on-hand reserves for Swiss Pensionskassen equalled 3.6% of total assets on June 30 - half the figure for December 31.

Partly because of this fact, the consultant recommends that the schemes have themselves reviewed with respect to potential financial and liquidity risks. On the other hand, Complementa rates the schemes' risk management as "high".

Finally, the survey gave more detail on how Swiss Pensionskassen invest. Smaller schemes have 29% invested in Swiss franc-denominated bonds and just 8% in those denominated in foreign currencies. Larger ones, meanwhile, have 22%-24% invested in Swiss bonds and 9.5%-11.5% in foreign ones.

"A similar picture is seen with equity allocation. While the equity portion at larger schemes is more than half foreign, smaller schemes have a bias toward Swiss stocks," Complementa said.