The Pension Funds Monitor is a real-time indicator of the financial position in the 2nd pillar. It provides information about the average funding ratio and the average investment performance of Swiss pension funds. The aim of the Pension Funds Monitor, besides gaining insight on performance, is to provide an indicator that can act as a key criterion for assessing the financial situation of pension institutions.
The calculations for the Pension Funds Monitor are based on data from the Pension Funds Study of Swisscanto Pensions Ltd. published annually.
The funding ratios of the current year are estimated and aggregated for the individual pension plan. Changes on the liabilities side are determined using the historical target returns of the previous year. If no reliable target return can be calculated, the average of the historical target returns is used. The performance of individual asset-side balance sheet items is simulated by means of index performances without deduction of asset management costs and under the assumption that no rebalancing takes place.
The result of the aggregation is the performance of the total assets. Weighted averages are, in principle, used for the estimations at the aggregated level. The weighted and the unweighted averages are given for the performance estimate: the unweighted average is the simple mean of the performance estimates at the level of the individual pension scheme.
We recognise that a consideration of the average funding ratio alone provides only limited information. Each pension scheme must be considered based on its individual situation.
The surveyed pension funds achieved an estimated asset-weighted yield of 1.86% during the second quarter of 2019 alone. All asset classes, with the exception of commodities, have contributed positively to the yield.
As a result of price gains, the reserves of the private pension funds also increased during the second quarter of 2019. With an estimated funding ratio of 116.1%, the private pension funds are now at their highest level since the end of 2008. The development of the funding ratios (estimates) is as follows:
|Pension schemes||Funding ratios 2018* in %||Funding ratios 31/03/2019 in %||Funding ratios 30/06/2019 in %|
|Private-law funds ||108.7||114.6||116.1|
|Public-law funds, |
|Public-law funds, partial capitalisation ||79.6 ||84.3||85.7|
*Results of the Swiss Pension Funds Study 2019.
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