Now that Swiss pension funds are making money, it seems as if companies and local authorities are reducing their contributions in remarkable style.

Top of the list is Kraft Jacobs Su-chard (Schweiz), with neither em-ployer nor employee paying any contributions this year. On average, each employee is saving CHF4,700 ($3,200).

PKE, the pension scheme for the Swiss electricity utilities, aims to cut contributions by a third. Textile machinery maker Rieter is financing early retirements with additional sums of Sfr60m, equal to 10% of its total assets.

After an extra pay-out last autumn, the SAirgroup is paying additional interest of 17% on the employer’s accounts. Hans Ulrich Singer of Sie-mens Schweiz, states that 1997 was the best year ever since he started managing the pension funds of the company in 1972. The fund put 7% of its assets into voluntary reserves for early retirements. Other schemes are seeking different but no less ambitious ways of making pay-outs.

In the public sector, distributing the the benefits is more controversial. Armin Braun, manager of the City of Zurich pension scheme admits that it s overfinanced to the tune of several hundred millions of francs. The pay-outs of the Canton of Zurich are well covered too. Both pension funds in-tend paying back, but will spread the extra payments over a number of years.

According to provisional results, the liabilities of several big pension funds are covered 120% by assets. The City of Zurich and PKE are estimated to be reaching 140%. As Herman Greber, managing director of PKE points out: We do not need that much money.” This excellent financial position is the result of outstanding performances in recent years, last year in particular when the fund achieved 20% returns on securities.

While there are no performance surveys, it seems that mid-sized funds did well too. Intersec, which measures the results of 86 portfolios managed by banks, calculated an average return of 15.8% for mixed portfolios, with the main contribution coming from Swiss shares, which rose 56%.

Thanks to the non-profit oriented endowments of the eight Swiss banks and insurance companies in the KGAST-Club, even smaller pension funds fared well. According to Watson Wyatt, which measures the performance of these companies, the mixed portfolios returned 15.5%. Erich Solenthaler”