Turbulence in the economy and on the financial markets – the pension institutes are also feeling the effects.

Last year was not a good one for pension funds. This is shown in the annual report of the Supervisory Commission on occupational pensions.

In particular, the fall in share prices has meant that many pension funds have made losses. The majority of these losses could be absorbed thanks to their reserves, but by no means all, as Vera Kupper sums up.

1.1 trillion francs to manage

Overall, employees in Switzerland have accumulated 1.1 trillion Swiss francs – 1100 billion – at the pension funds. The approximately 1,400 funds manage the money and try to generate the highest possible return with the lowest possible risk – so that the insured receive a secure pension from the second pillar after retirement.

“Some pension funds built up too few reserves in the good years. You are now underfunded, »says the President of the Supervisory Commission. Underfunding means that the pension funds currently do not have enough money to theoretically be able to pay out all pension entitlements.

Many cash registers in shortfall

The number of funds with underfunding increased sharply last year: a total of a good 600,000 insured or pension recipients were affected by the end of 2022. In the previous year, the number was only around 2,000 people.

For the time being, however, those affected do not have to worry about their money. Nevertheless, the respective cash registers have to show how they can get enough money again. Otherwise they have to act and, if necessary, increase the contributions of insured persons and employers. However, this is an unpopular measure.

Rising interest rates as an advantage

The supervisory commission warns that the pension funds must take measures in good time because restructuring is difficult. This has to do with the currently gloomy global economic outlook.

The cash registers would now have to think carefully about how they want to position themselves. Because: “The starting position has become more difficult,” says Kupper.

However, there are two rays of hope: the rise in interest rates means that health insurance funds can again invest more in government bonds and also receive interest again. This was no longer the case during the period of negative interest rates.

At the same time, the situation on the stock markets has also brightened somewhat. This means that the situation for many pension funds did not deteriorate any further in the first quarter of this year.

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