SWITZERLAND - Ascoop, a CHF2.25bn (€1.36bn) pension fund for the Swiss transport sector, has made progress in restoring its financial health and cut its funding deficit last year by 22% to CHF622m.

In a statement, Ascoop said the deficit cut was made possible in part by a return on assets of 5.54% - or above its target of 5%.

Ascoop added another CHF45m for deficit reduction came from some of the 155 transport and tourism firms tied to it.

At the same time, Ascoop reported as a percentage, its aggregate funding ratio was 78.2% of liabilities - one of the lowest ratios among Swiss private schemes.

Ascoop's structural deficit largely stems from overexposure to shares, particularly technology stocks during the equity bear market of 2000-2003. In November 2005, Ascoop director Urs Niklaus told IPE it would take the scheme up to 15 years to erase the deficit.

To restore its financial health, Ascoop in early 2006 switched to defined contribution from defined benefit and raised contributions from its 9,000 members. It also has asked the government for financial support, but so far none has materialised.

According to Ascoop, its financial woes were compounded by the "dubious business practices" of former chief executive Jean-Claude Dueby and former president Peter Joss.

In 2003, Ascoop sued both men for damages. While Dueby has settled out of court, Ascoop's claim against Joss still stands.

In the statement, Ascoop also said it would seek compensation from Cofima, a bankrupt IFA the scheme had invested in under Joss .

But, "following the recommendation of two legal experts, Ascoop's board has decided against widening the claims against Peter Joss and Cofima, as it would have very little chance of succeeding".

In related news, Ascoop said Rudolf Hediger, a senior finance official at the Swiss national railway, had been elected its new president, effective from January 1, 2008. The scheme added that its return for the first five months of 2007 was 3.8%.

Ascoop invests around 27% of assets in equities, including around 19% which are foreign. Another 27% is allocated to fixed income, including 21% denominated in Swiss francs.

Ascoop also has 24% of assets invested in real estate, almost all of which is in Switzerland. Liquidity accounts for 6.4% of assets and commodities 3.7%.