SWITZERLAND - The pensionskasse for the northern Swiss canton of Thurgau (PKTG) has hired Swiss consultancy Complementa to conduct an ALM study, after returning -18.9% last year.

The pensionskasse, which was created through a merger of two public funds in the canton in 2005, had reached its aim of being 115% funded in 2007, eight years earlier than expected thanks to its equity exposure. (See earlier IPE-article: Thurgau fund returns 11.5% in 2005)

But having a 37.6% equity exposure last year meant that the fund was hit harder by the financial crisis than at other Swiss pensionskassen.

The equity exposure has since dropped to 27%, and the fund has another 27% in bonds, 16% in real estate, 10% in alternative investments, with its remaining assets in cash, mortgages and loans.

However, as a consequence of last year’s equities downturn, the funding level dropped from 115.1% in 2007 to 92% by the end of 2008.

Assets in the pensionskasse fell from CHF2.4bn (€1.6bn) to CHF2.03bn at that time, although its funds have since grown again to CHF2.05bn by the end of June.

The PKTG noted that the board, together with Complementa, has come up with a more “neutral” asset allocation, as well as new strategies for risk management and currency overlay, which will now have to be put in place.

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