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IPE special report May 2018

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Swisscanto sees easing of funding crisis

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  • Swisscanto sees easing of funding crisis

SWITZERLAND - The average funding level of Swiss pension funds has recovered slightly since the beginning of this year to 93.4%, according to Swisscanto calculations.

Switzerland's 441 pensionskassen included in the Swisscanto monitor - which have combined assets under management of CHF360bn (€237bn) - saw their funding levels  worsen in the first quarter of this year, as the weighted average fell from 91.7% at the end of last year  to 90.2% by the end of March.

Funding levels have recovered slightly since then and increased again by 1.7 percentage points.

The recovery has been similar for both private and public funds, as the first group increased their funding levels from 97% to an average of 98.9% and public fund lifted funding levels from 85.9% to an average of 87.4%.

"The positive result was caused mainly by the recovery of the equity markets in the second quarter," said Swisscanto.

That said, the asset manager stressed despite the slight recovery the funds had not gotten over the crash suffered last year and argued their situation remains "strained".

"In total, 53% of all pension funds remain underfunded. That is as much as 82% of public pension funds and 48% of private funds," said the asset house.

Unweighted results disclosed by regional supervisory authorities from the north-west of Switzerland had recently painted a brighter picture of the funding situation. (See earlier IPE article: Swiss pension figures brighten funding picture

The asset manager calculated pensionskassen generated a 2.9% return in the first half of this year - a result similar to that reported by State Street. (See earlier IPE story: Swiss funds see first gain since 2007 - State Street)

 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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