Swiss Pension Funds Perform Well In Q1 2024

Mon, May 6th 2024

Building on last year’s momentum, Swiss pension funds record robust early gains in 2024, showcasing financial resilience amid economic challenges.

In 2024, Swiss pension funds seamlessly continued the good performance of the previous year on the investment side. The pension funds achieved positive returns in the first four months, which contributed to an improvement in their financial situation.

From January to April, pension funds posted an average return of 2.8% despite persistent inflation and the resulting dampened hopes of interest rate cuts, according to pension fund consultant Complementa.

The positive returns are strengthening the pension funds’ financial framework. Complementa estimates that contribution margins had risen to an average of 110.2% by the end of April, up from 107.9% at the end of 2023. In 2022, this figure had slipped to 104.0% in the wake of a weak stock market year.

The funds performed well in 2023, a year characterised by geopolitical tensions and a tighter monetary policy. On average, they achieved an investment return of 5.3%. This results in an annual return of around 3.5% for the past decade, the report continues.

The good stock market performance also benefited insured persons in the second pillar. According to Complementa, pension funds earned an average interest rate of 2.2% on employees’ pension capital in 2023, which is higher than the BVG minimum interest rate of 1.0% set by the Federal Council.

The Complementa “Risk Check-up” study was conducted for the 30th time and will be published in full in September. The previous year’s study was based on data from around 440 pension funds with deposits of over CHF 760 billion.

©Keystone/SDA

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