Swiss pension funds returned 6.6% year-to-date in 2024, according to the latest Pensionskassen-Monitor published by Swisscanto today. This is above the 5.1% recorded on average last year, but with returns fluctuating strongly in H1.
Pension schemes in Switzerland returned 0.77% on average in the second quarter of the year, according to the Pensionskassen-Monitor, in sharp contrast with average returns of 5.8% recorded in the first quarter.
The performance of the schemes over the first half of this year was affected by markets’ reaction to political events like elections in France and in the UK, instead of labour markets, growth and inflation figures, Swisscanto said.
Uncertainties associated with those political events weighed on local stock markets, but the first interest rate cut of the European Central Bank, and a further cut by the Swiss National Bank, lightened the mood again, it added.
The asset-weighted returns stood at 6.6% in H1 and the unweighted returns at 6.3%, according to Swisscanto’s report.
Funding ratios
While returns slowed down remarkably during the first half of the year, the level of funding ratios stabilised after a clear improvement recorded in Q1.
The funding ratios of private pension funds went up marginally by 0.4 percentage points quarter-on-quarter, ending at 120% in June this year, figures published by Swisscanto show.
The funding ratios of public sector pension funds show a similar picture. Those of fully funded public pension schemes stood at 112.4% at the end of H1, also up by 0.4 percentage points quarter-on-quarter.
The funding ratios of partially-funded public pension funds went up by 0.5 percentage points this year to reach 112.4% at the end of H1.
All private pension funds have a funding ratio of over 100%. About three-quarters (74%) of private pension schemes have a funding ration of 115% or more, Swisscanto added.
Half of the fully funded public pension funds have a funding ratio of at least 115%, according to the report.
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