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A 25-year old in Switzerland today would be set for a corporate workplace pension five percentage points lower than that of a compatriot only a few years older, according to a study by Willis Towers Watson.
The consultancy’s Swiss arm regularly carries out a benchmarking study of the pension plans of companies making up the Swiss Leaders Index (SLI). This comprises the issuers of the 30 largest and most liquid securities in the Swiss equity market. Companies such as ABB, Julius Baer and Nestlé are currently in the index.
BVK, the CHF31.8bn (€27.8bn) pension fund for the canton of Zurich, has opened itself up to manage pension plans for employers across the rest of Switzerland. Taking on new schemes would benefit BVK’s risk profile and member structure, it said. It would only accept new joiners if this were in the collective interest of BVK’s existing members and affiliated employers.
Swiss voters have thrown out plans to reform the creaking state pension system, highlighting the difficulties even prosperous western European countries face adapting welfare regimes to cope with ageing populations.
Authorities pushing the first serious reform of the pension system in two decades had warned that old-age benefits were increasingly at risk as life expectancy rises and interest rates remain exceptionally low, cutting investment yields.
It has, to put it mildly, been a good year for passive investment funds that track a broad market index like the FTSE 100. Much of it has been at the expense of their active peers which try to seek out undervalued investments. Almost $500 billion has moved from the latter to the former so far this year. This keeps up a trend that has seen massive flows from active to passive strategies in recent years and the gradual growth of passive over the last 30 years.
Finland’s Varma Mutual Pension Insurance Company- the country’s largest pension fund- told Bloomberg it has reduced its exposure to stocks by five per cent, most of that reduction coming from U.S. stocks.
"It seems as if there is no president in the U.S.," Varma CEO Risto Murto said. "If I look at what is the moral and practical power, there is no longer a traditional president."
