SWITZERLAND – Equities boosted Swiss Pensionskassen’s first quarter performance and helped companies improve funding levels in their pension plans.
According to the most recent calculations by Towers Watson, the funding level of company pension schemes “improved significantly” over the first quarter 2013 as pension assets returned 5%.
Funding levels increased by six percentage points from 89.7% to 95.8% following a slight recovery of the discount rate from 1.62% to 1.74%, Towers Watson added in a statement.
Figures by Credit Suisse calculated a slightly lower return on assets for its sample of various pension funds, coming in at 3.42% for the first quarter.
Similar to the consultancy’s estimates, the bank identified equities – domestic as well as foreign – as the main performance drivers over first three months.
Among the Pensionskassen sampled by Credit Suisse there was a tendency to reduce liquidity and bond exposure in favour of buying domestic and overseas equities.
Meanwhile, the largest public pension fund Publica confirmed a return of 7.94% for 2012 and said its funding level had improved from 103.1% to 105.2% year-on-year despite launching a buffer fund that would contain 2.5% of assets under management.
The reserves will partly be used to compensate members for the cut in the conversion rate used to calculate the pension from the accumulated capital to 6.15% in mid-2012.
Given the low expectations on returns the fund also decided to lower the discount rate, or Technischer Zins, for active members by 75 basis points to 2.75%. The new rate will apply from 2015 on all members in open portfolios.
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