Swiss pension funds returned 6.2% on average last year, according to a preliminary performance comparison by Towers Watson commissioned by Asip, the Swiss pension fund association.

The consultancy, drawing on asset-allocation reports from June 2013, said equities appeared to be the main driver of returns. 

It calculated a 6.2% median return for 2013 and a 3.7% median return over the last 10 years for Swiss schemes.

Asip highlighted that some pension funds with riskier strategies and higher-than-average equity allocations “even managed to return more than 10% in 2013”.

Domestic equity exposure among the 62 pension funds participating in its survey – with more than CHF188bn (€152bn) in combined assets – ranged from 3% to 20%, while foreign-equity allocations ranged between 6% and 42%.

The median allocation to domestic equities was 10%, to foreign equities, 21%.

On average, bonds comprise about 40% of Swiss pension funds’ portfolios, Asip said.

Meanwhile, the CHF8bn Aargauische Pensionskasse (APK) has informed its members that it will be unable to increase the interest on accrued capital for this year, despite having reported relatively strong returns.

Preliminary calculations show a return of 4.5% for the APK, which has invested around 25% of its portfolio in equities.

The fund said it would need to strengthen buffers to account for increasing longevity, which means the funding level will remain at around 96%, and the interest granted on accrued capital at 1.5%.

It added that generally low interest rates had continued to put pressure on its asset-allocation decisions – despite the fact strong equity performance largely offset commodity prices and slightly rising rates.

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