The pension fund for the employees at Swisscom – comPlan – has generated returns of CHF1.19bn (€1.12bn) last year, up from CHF463m in 2020, according to Swisscom’s annual financial statement.
The pension fund recorded overall a 9.70% return in 2021, an improvement from 3.7% in 2020 on total assets worth CHF13.1bn, up from CHF12bn in the previous year.
ComPlan invests 4.9% of its assets in Swiss government bonds, 5.5% in Swiss corporate bonds, 4.6% in developed markets government bonds, 9.8% in developed markets corporate bonds, 7.7% in emerging market government bonds, 4.8% in private debt, 7.5% in Swiss equities, 14.3% in developed market equities, 5,3% in emerging market equities, 14.5% in Swiss real estate, 7.4% in foreign real estate, 3.4% in commodities, 9.3% in private markets, and 1% in cash, cash equivalents and other investments, as of the end of December according to Swisscom’s statement.
Pension plan assets include Swisscom’s shares and bonds with a fair value worth CHF12m in 2021, up from CHF10m in the prior year.
ComPlan’s technical funding ratio stood at 120% last year from 112% in 2020 according to Swiss accounting standards (Swiss GAAP FER 26), which are relevant for the pension fund. The technical interest on pension capital remained unchanged year-on-year in 2021 at 1.75%.
This year Swisscom expects to make payments to the pension fund for statutory employer contributions totalling CHF268m.
ComPlan’s investment strategy is based on a broad diversification in investment categories, markets, currencies and industry segments in developed and emerging markets.
According to the statement, the interest rate duration of interest-bearing assets was 7.9 years in 2021, compared with 7.8 years in the previous year, the average rating of its assets is BBB+.
Foreign currency positions are hedged against the Swiss franc following a currency strategy necessary to meet a pre-determined ratio of 85%, the statement added.
The pension fund recorded an actuarial gain of CHF250m last year resulting from changes in demographic assumptions, mainly due to the application of new mortality rates.
St. Galler Pensionskasse’s positive returns
The performance of the St.Galler Pensionskasse, which provides occupational pensions to the employees of the canton of St. Gallen, went up to 7.73% above its 7.55% benchmark, as of the end of December last year, from 4.37% in 2020.
This was the result of positive developments in equity markets, it said in its latest provisional financial statement.
Last year’s results reinforced the scheme’s funding ratio which improved to 108.91% from 103.28% the previous year. The Pensionskasse continues to apply an interest rate of 2% on members’ pension savings, it said.
It had assets under management of CHF10.5bn in 2020, which were allocated as 26.5% to Swiss bonds, 5.3% to government bonds denominated in foreign currency, 4.3% to corporate bonds denominated in foreign currency, 12.2% to Swiss equities, 22.4% to foreign equities, 3.3% to indirect real estate, 12.4% to direct real estate, 1.6% to mortgages, 4.5% to cash and 7.5% to other investments, according to the statement.
The Pensionskasse will publish its final annual report with the results for the 2021 financial year at the end of June.
BLPK records 8.1% returns
The pension fund for the Swiss canton of the Basel-Landschaft, Basellandschaftliche Pensionskasse (BLPK), has recorded a 8.1% returns in 2021 against 5.1% in 2020.
The current investment environment and policies of central banks drove the good performance last year, the Pensionskasse said, alongside its investment strategy.
Over the course of the last 10 years, BLPK generated around 0.5 % returns per year and over a period of 10 years returned around 5%. Its funding ratio stood at 110.6% according to the latest financial report.
The fund caters for almost 26,000 members and more than 11,000 pensioners. Total assets under management are close to CHF11.5bn, up from CHF10.8bn in 2020.
BPK cashes in with equities
Net returns on assets for the pension fund of the canton of Bern, Bernische Pensionskasse (BPK), stood at the end of last year at 9.47% (unaudited), up from 3.5% in 2020, below its benchmark of 9.56%.
In particular Swiss equities (23.56%), European equities (21.58%), US equities (26.72%) pushed up returns. Real estate investments returned 10.50%, and mortgages 0.89%. Swiss bonds (-1.89%) and bonds denominated in foreign currency (-2.58%) recorded losses.
In view of the above-average net return and the improved financial situation, BPK paid an interest on pension savings of active members in 2021 of 3.75%, setting an interest rate on savings at 1% for 2022.
The scheme’s funding ratio stood at 97% at the end of last year. Total assets reached CHF16.69bn at the end of December, split into 49.95% nominal value investments and 50.05% real asset investments.
Novartis pension fund introduces new climate strategy
The pension fund of the pharmaceutical company Novartis is aligning its investment activities towith Paris Agreement goals in a new climate strategy being implemented this year.
The scheme is setting a goal to cut net greenhouse gas emissions by 50% by 2030 in its equity, corporate bond, and real estate portfolios to drive long-term returns.
It will swap investmetns in fossil fuels and other sources of greenhouse gas emissions with allocations in renewable energy sources, therefore increasing its equity investments in solutions beneficial for the climate above the global equity market benchmark (MSCI World).
For green bonds, infrastructure, renewable energy production and distribution, the pension fund has set a 15% allocation target. It is also joining the Net-Zero Asset Owner Alliance.