The funding ratio of Swiss Pensionskassen bounced back to 103% in April after declining to 99.8% for a short time at the end of March, according to Complementa’s latest “risk check-up” analysis report.

Central banks have sent a clear message through a series of interventions to say they “stand by” the equity market “whatever it costs”, Thomas Breitenmoser, head of investment consulting at Complementa, told IPE during a conference call.

The funding ratio of Swiss pension schemes will depend on the future of equity markets, he said, adding that it should not drop further as long as national banks keep their current policies in place.

The analysis focuses on 158 Pensionskassen with total assets of CHF396bn (€371), and it is based on previous year’s data of 437 pension funds with assets worth CHF650bn, which represents 70% of the Swiss occupational pension system.

The study differentiates between public pension funds with funding ratios under 100%, and private funds with funding levels of around 107.5%. “The coronavirus crisis leads to uncertainty, to problems for the financial market and to negative returns,” said Jürgen Rothmund, investment analyst and author of the report.

This year Complementa expects different performance levels from pension funds, which will depend on their reaction to the crisis. “There will be funds with less strong negative returns and funds with very strong negative returns,” he added. Returns reached -3.9% at the end of April compared to 10.6% in 2019. Higher returns were only recorded in 2005 with 11%.

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