SWITZERLAND - The CHF6bn (€4.1bn) 'safety net' fund, AEIS, has finished a major administration restructuring and remains "comfortably funded" at 105% per year-end 2009, according to its CEO, Markus Stieger.
The 'Auffangfonds' manages money for people who fall between Pensionskassen and who have yet to make an active decision as to where to put their money while, for example, while they are unemployed or on maternity leave.
An additional part of this fund's role is to act as a default option for companies which may have only one or two employees and are therefore not attractive enough as clients for commercial Pensionskassen, and which cannot join other multi-employer schemes.
A third remit of the fund is to manage the state's money for unemployment insurance, albeit this role is independent from the state despite having two federal representatives on the supervisory board, one of whom is Anton Streit from the social ministry.
Prior to January 2009, the AEIS only had a foundation board. But Stieger, as its CEO was tasked with coordinating its contractors to outsource certain parts of the fund's administration and management.
"The full outsourcing model did not work so well for us as it was difficult to coordinate all outsourcing partners. And it was a misconception that it would be cheaper to outsource everything," explained Stieger.
Over the course of 2008 and 2009, the fund hired 130 people and managed to cut almost half of its administration costs by, among other things, creating a fully computer-based system to deal with enquiries and claims.
While the actual management of the assets remains outsourced, the fund also hired Marco Bagutti, formerly with Pictet Asset Management, as head of asset management to draw up asset allocations and assist with decision-making.
The fund's asset allocation in 2009 was distributed as approximately 75% in bonds, 15% in equities, as well as 10% real estate although "a small part" of all assets was also held in commodities and hedge funds.
"The financial crisis has drastically lowered our risk capacity," said Stieger.
The fund had reported 13% negative performance in 2008 and did not rebalance its equity exposure, which remained at 12% instead of the strategic level of 30%.
The fund's 2009 performance figures will only be available in the annual report to be published in June.
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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