Profond, the Swiss pension fund for small and medium-sized companies with CHF12.8bn in total assets, has recorded a 9.6% return, and a funding ratio of 110% in 2024, according to unaudited figures published by the scheme.

Last year, the pension fund recorded a 4.6% return and a funding ratio of 107%, according to a report.

The result in 2024 demonstrates Profond’s continued financial stability and resilience, the scheme said in a note, adding that “consistently positive returns” mean an average 4.5% interest rate on the retirement savings of the scheme’s members over the last five years.

The scheme’s board of trustees has decided to use part of the returns to strengthen its reserves to fend off market fluctuations, and to apply an interest rate of 8% on retirement savings in 2024.

The board has also decided to keep the conversion rate to calculate pension payouts (Umwandlungssatz) unchanged for the years 2025, 2026 and 2027, at 5.6%.

“We offer our members an interest rate well above the statutory minimum [of 1.25%] again this year. Our investment strategy, which relies heavily on asset classes including equities and real estate was once again very successful last year,” said Profond’s managing director Laurent Schlaefli.

The pension fund invests 31.6% of total assets in foreign equities, 20.8% in domestic equities, 24% in real estate, 9.6% in bonds denominated in foreign currency, 2.2% in Swiss bonds, 2.4% in cash, and 9% in alternatives.

Foreign equities returned 24%, and Swiss equities 9.8%, as of last November, while Swiss bonds returned 4.6%, bonds denominated in foreign currency 0.7%, real estate 1.5%, and alternative investments 5.1%, according to Profond.

“2024 was a brilliant year for us [even though] the Swiss stock market disappointed a bit. Above all, US stocks had a super performance,” Schlaefli added in an interview with Neuer Zürcher Zeitung (NZZ).

From this year, retirees at Profond can also opt for a pension with capital protection for a limited period of time.

This means that retirement savings in the event of the death of the retiree are protected for 10 years, up to the age of 75, with the conversion rate to calculate pensions cut by 0.2 percentage points.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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