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Coverage ratio of the pension funds declined

The balance sheets of the Swiss companies have deteriorated in 2018, with a view to the pension plans. Reasons for this are yields in the negative and continued to see uncertainty on the markets. Overall, the pension funds are well positioned but still good.

The average coverage ratio – i.e. the ratio of pension assets to pension liabilities – the thirty largest companies of the Swiss exchange St. in 2018 to 4 percent. Thus, the pension obligations were covered only 81 per cent to 85 per cent in the previous year by the corresponding plan assets, such as the consulting firm of Willis Towers Watson writes in a report published on Tuesday.

The degradation is based on a decrease of the Pension liabilities of 4.4 billion Swiss francs, or 2.2 percent, while at the same time, plan assets was a loss of 4.0 billion or 4.4 percent. In order for the company to be positioned overall, but still good, the consulting firm.

Switzerland falls behind in international comparisons

Against the Background that with AXA, one of the most important providers of collective-full-insurance solutions in this market is excreted, will it be more difficult, the long live to guarantee risk of the pension funds on the market.

Worldwide, the degree of Coverage in 2018 have fallen. The average coverage of (American)companies, grouped in the Willis Towers Watson Pension 100 Index, fell to 86 percent from 87 percent in the previous year. It coincides with a coverage ratio of 81 per cent in the international comparison.

the deterioration of The performance of Switzerland in comparison to other countries leads Willi tower Watson, especially on the much deeper level of interest rates in Switzerland as a result of the negative interest rate policy of the national Bank.

Clouded prospects

"If interest rates remain low or even fall further, as is currently the case in the world can be observed, this further increased obligations," says the communication from a pension Fund expert Peter Zanella. This will increase the financing needs and requires, under certain circumstances, Changes to the investment strategy, as well as power adjustments.

The Pension Risk study of Willis Towers Watson examined the pension obligations and the level and development of the pension costs of the companies in the Swiss Leader Index (SLI). This Index comprises the 20 SMI companies and the 10 largest values of 30 SMI Mid Cap title. (ij/sda)

Created: 02.07.2019, 10:36 PM

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