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Pension funds have absorbed 2018 fall in stock market values

Summary:
16.12.2019 – Overall, the pension funds survived the weak stock markets in 2018. By dissolving 40% of the existing fluctuation reserves, the negative net result from investments was largely offset. The shortage increased by 20%. This emerges from the definitive results of the Pension Fund Statistics 2018 of the Federal Statistical Office (FSO). The correction on the financial markets, especially towards the end of 2018, left its mark on the investment side of the pension funds. The proportion of shares fell to 27.9% of total assets and fell behind the bonds again with 31.4%. Real estate remained unchanged in third place with 20.3%. Net income from investments closed at CHF –25.5 billion. As a result, 34 billion francs in fluctuation reserves were released on the

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16.12.2019 – Overall, the pension funds survived the weak stock markets in 2018. By dissolving 40% of the existing fluctuation reserves, the negative net result from investments was largely offset. The shortage increased by 20%. This emerges from the definitive results of the Pension Fund Statistics 2018 of the Federal Statistical Office (FSO).

The correction on the financial markets, especially towards the end of 2018, left its mark on the investment side of the pension funds. The proportion of shares fell to 27.9% of total assets and fell behind the bonds again with 31.4%. Real estate remained unchanged in third place with 20.3%. Net income from investments closed at CHF –25.5 billion. As a result, 34 billion francs in fluctuation reserves were released on the liabilities side. This portfolio declined from 9.5% of total assets in the previous year to 5.8% or CHF 50.8 billion in 2018. The mechanism of long-term reserve formation for most pension funds thus absorbed the temporary fluctuations in the financial markets.

Shortage has increased

The shortfall rose to CHF 38.6 billion. For the most part, this coverage gap is covered by government guarantees. Underfunding increased by CHF 3.2 billion in the 72 public-law pension funds and CHF 3.1 billion in 1490 private-law pension funds. The total assets of the 1562 pension funds amounted to CHF 875.8 billion (–2.1%).

Insured and retirement benefits

Pension fund statistics counted 4.2 million active insured (+ 1.6%), of which 2.4 million were men and 1.8 million were women. 305 684 recipients and 492 870 recipients of old-age pensions received an average of CHF 28 947 per year. 15 556 women and 26 568 men demanded a total of CHF 8 billion (+ 9.4%) as a lump sum or partial lump sum payment upon retirement. The average value of the capital withdrawal was CHF 189 751 (2017: CHF 188 842; + 0.5%).

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Swiss Statistics
The Swiss Federal Statistics Office publishes information on the situation and developments in Switzerland in a multitude of fields and plays a part in enabling comparisons at an internal level.

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