Aargauische Pensionskasse (APK), the Swiss pension fund for employees of the canton of Aargau, recorded an asset return of 3.8% in 2020.
Equities, real estate and commodities contributed to the positive results, he said. Indirect investment in Swiss real estate yields 7.7%, foreign equity 6% and commodities (hedging) 4.6%, according to the fund’s financial statements for 2020.
APK allocates 14.1% of its pension assets for foreign equity, 10% for Swiss equity, 9.2% for Swiss bonds, 6.6% for direct investment in Swiss real estate, 6.2% for real estate foundations, 4, 6% for indirect real estate, 3.9% for foreign indirect real estate, 3.3% for commodities, 4% for infrastructure projects and 1.9% for private debt.
It also invests 3% in foreign government bonds, 4.8% in foreign corporate bonds, 3.4% in hard currency emerging market debt, 1.1% in emerging market debt in local currency, 4.2% in equity emerging markets, 4.9% in mortgage loans, 2.9% in affiliated employer loans, 6.4% in general loans, 2% in insurance-related securities, 1% in other alternative investments, with remaining assets in the portfolio liquidity.
Funding assets increased by CHF0.5m last year to a total of CHF12.1bn (€ 10.9bn). Its funding ratio decreased by 0.7% year-on-year in 2020 to 104.2%.
GER covers the interest paid on pension capital, accrued liabilities, and administrative costs in the reporting year as a result of its positive performance.
The scheme applies an interest rate on pension capital of 1.25%. This will bring down the conversion rate from 5.3% to 5% from 2022.
APK collected a further pension provision of CHF225 million as a consequence of the persistently low interest rate environment and technical rate cuts. The fund’s financial stability is guaranteed only by its full reserve amount to withstand volatility in equity markets, he said.
Allianz slashed conversion rates
Allianz Suisse will gradually deduct the conversion rate used to calculate pension payments at retirement from 2022.
Allianz, which has 14,000 affiliates and 85,000 insured in Switzerland, will reduce the minimum level of pension assets for men and women from 6.60% in 2022 to 6.40% in 2023 and to 6.20% from 2024.
The conversion rate of pension assets above the mandatory share of pension work for women who are already insured in the first pillar pension system and with a minimum wage of CHF21,510 (€ 19,374) per annum will fall from 4.60% in 2022 to 4.44% in 2023 and will be 4.28% from 2024.
The conversion rate of men’s pension assets over the mandatory share of employment pension will fall from 6.65% in 2022 to 4.49% in 2023 and to 4.33% from 2024.
Plans to reform the second pillar pension system in Switzerland forecast a reduction in the conversion rate from the current 6.8% to 6.0%. Allianz has called for “rapid and significant reduction” of the conversion of the second pillar to ensure the financial stability of the system and the fair distribution of pension assets between generations.
Impact Investment PG launched a climate strategy
PG Impact Investments, which is owned by the Swiss non-profit PG Impact Investments Foundation, has launched a climate growth strategy and overhauled its executive board.
It has hired Kayode Akinola of private equity firm KKR as a new member of the board to lead a new global private equity direct investment practice. Akinola will work with Benjamin Hogan and Claude Kamga to implement a climate growth strategy.
PG has a climate growth fund with a target size of $ 300 million in the pipeline to support GHG neutrality, energy transition, electrification and a circular economy.
The University of Zurich initiates a survey of Pensionskassen investment delegates
The University of Zurich (UZH) has started a survey of investment delegates in Swiss pension funds.
The purpose of this survey is to assess the current status of investment delegations in Switzerland and the motivations behind investment delegations.
The survey is divided into two main sections, one section on Pensionskassen’s profile and the second on investment delegations.
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