"Swiss Pension Funds 2012" survey by Swisscanto: Presentation of Results
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"Swiss Pension Funds 2012" survey by Swisscanto: Presentation of Results
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Press Release
Swiss pension funds fail to meet targets
Zurich, 22 May 2012 - The results of Swisscanto's survey of Swiss pension funds
show that the required yields were not delivered in the 2011 reporting year.
This led to a continued reduction in cover ratios, although private pension
funds reported reserves of on average more than 100%. Achieving the necessary
target yields remains the greatest challenge for those in charge in the current
year.
The present survey of 326 participating funds, altogether representing 2.5
million beneficiaries and fund assets of CHF 426 billion allows informed and
differentiated predictions to be made concerning the current state of
occupational pensions in Switzerland, as well as providing an insight into the
structure, organisation, investments and performance of the participating funds.
Slightly negative performance reduces cover ratios
The net performance as measured by the survey gives a meaningful and easily
understood insight into the current financing situation for pension funds. The
figure recorded for 2011 is -0.32%, which has led to a mild erosion of assets.
The yields achieved predominantly fall within the -2.5% and +2.5% range. Barely
half the participating funds (46%) managed to achieve a positive result.
Occupational pensions have been tarnished by unsatisfying capital gains for
several years now. Despite a very strong result in 2009, the average yield of
all participating funds over a five-year period is positive by only a small
margin of 0.2% p.a.
Cover ratios have dropped more dramatically due to pension liabilities with
higher interest rates. A drop from 106% to 103% was recorded for private-law
funds and from 98% to approximately 95% for public-law funds with full
capitalisation.
Increase in recapitalisation measures for public-law funds
It does not come as a surprise that the current situation has forced several
pension funds to carry out further recapitalisation measures. According to this
year's figures, this applies to 19% (previous year: 20%) of private-law funds
and a surprising 38% (previous year: 34%) of public-law funds. The most commonly
named measure at 70% was to reduce rates (for all-inclusive pension schemes),
followed by charging recapitalisation contributions from employers and
employees.
Reducing interest rates and charging recapitalisation contributions affect those
in work more significantly as they have to finance the capital of pensioners due
to statutory guarantees. The survey puts the number of beneficiaries who are
pensioners at 25%, of whom two thirds are old-age pensioners.
Once again the previous year's results show that the politically determined
levels for minimum interest and conversion rates are, however, higher than the
yield achieved, resulting in a greater coverage shortfall. In light of the
persistently low interest rates, the prospects of attaining the necessary target
yields continue to be highly uncertain, meaning that those in charge have a
difficult task ahead.
Hedging against inflation and currency risks sought
The prevailing uncertainty is closely linked to haziness surrounding the future
of the euro zone. ECB support measures have resulted in a massively increased
supply of money, but at the same time the deficit countries are also obligated
to impose strict austerity measures. In a time of persistently low growth, low-
interest policy carries the risk of deflationary trends, whereas money supply
expansion could lead to accelerated inflation. Depending on the expected
development, the funds would have to employ completely different strategies. The
survey reveals that if the current situation endures, low interest rates and low
inflation can be expected. No participating funds predicted sharply rising
inflation and 35% expect a slight increase in price rises. All other
participants are expecting constant or occasionally falling inflation.
How do funds realise their expectations? Assets in the form of real estate
investments or shares were mentioned by 72% and 60% of the participants
respectively as a means to protect against inflation. These were followed by
commodities (40%), cash (37%) and gold (31%). Inflation-indexed bonds,
particularly government bonds, come in last and thus only play a subordinate
role.
Generally speaking, the sometimes dramatic currency trends recorded over the
past two years have emphasised the importance of currency hedging. Indeed,
around two thirds of funds involved in the survey hedge their foreign currency
investments to varying extents. This hedging is used primarily for foreign
currency bonds, on average at the rate of two thirds of funds, whereas only one
quarter use a full hedge. Below this are commodities, private equity and
international stocks, in order of the level of hedging used. Hedge fund
investments come in at the bottom of the list.
Low-interest environment: a constant challenge
Asset allocation experienced hardly any change in the past year. The percentage
of assets made up by bonds increased slightly from 36.7% to 37.3%, primarily due
to exchange rate fluctuations. The current low interest rates on bonds carry
considerable price risks for those investing in bonds. The survey therefore
asked specific questions about changes in this area. It was ascertained that
around half of funds made changes to their portfolio composition last year.
Particularly noticeable was a decline in government bonds in favour of corporate
bonds. One in five participating funds also expanded their proportion of
emerging market bonds.
12th Swiss Pension Funds survey by Swisscanto
This year's survey involves 326 (previous year: 361) pension funds representing
2.5 million beneficiaries and fund assets of CHF 426 billion. The number of
respondents and assets remained constant on the previous year, although the
number of participants decreased by around 10%. This can be traced back to the
declining number of autonomous and semi-autonomous funds in favour of collective
funds and the constant increase in surveys, which are a considerable burden on
participants. The data remains very representative. In many aspects of
occupational pension provision, the Swisscanto survey offers the only reliable
and statistically verified results.
Thanks to their significance and transparent compilation, the survey results
serve as a valuable and oft-used tool, not only for those in charge of pension
funds but also for those interested in politics, social sciences and media.
Detailed evaluation
Further information and detailed results with diagrams and comments can be
accessed at www.swisscanto-pk-studie.ch.
In September, Swisscanto will once again publish a detailed study with analyses
and comments by experts.
Your contact:
Beat Amstutz, Head of Communication
Phone +41 58 344 43 21, beat.amstutz(at)swisscanto.ch
Roman Kappeler, Deputy Head of Communication
Phone +41 58 344 44 42, roman.kappeler(at)swisscanto.ch
Swisscanto Holding AG, Waisenhausstrasse 2, CH 8021 Zurich
www.swisscanto.ch
Swisscanto - a leading Asset Manager
Swisscanto is a leading investment fund provider, asset manager and provider of
occupational and private pension solutions in Switzerland. The joint venture of
the Swiss Cantonal Banks manages client assets of CHF 52.8 billion and employs
390 people in Zurich, Berne, Basel, Pully, London, Frankfurt, Milan and
Luxembourg (31 March 2012).
As a proven specialist, Swisscanto develops high-quality investment and pension
solutions for private investors, companies and institutions. Swisscanto is
regularly recognised nationally and internationally as an outstanding fund
provider. Swisscanto is also famous for its pioneering role in sustainable
investments and for the "Swiss Pension Funds" study, which it publishes
annually.
"Swiss Pension Funds 2012" survey by Swisscanto: Results:
http://hugin.info/134397/R/1613536/513853.pdf
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Source: Swisscanto Holding AG via Thomson Reuters ONE
[HUG#1613536]
Unternehmensinformation / Kurzprofil:
Datum: 22.05.2012 - 10:00 Uhr
Sprache: Deutsch
News-ID 148680
Anzahl Zeichen: 9662
contact information:
Town:
Bern 25
Kategorie:
Business News
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