Occupational pension provision with high interest rates
After a strong investment year in 2024, the pension funds are more financially robust than ever. With an average performance of 7.4% and an increase in the coverage ratio to 114.7%, insured persons are also benefiting directly: The interest rate on their retirement assets was higher than it has been for years. At the same time, the OPSC BV is focussing on structural challenges and regulatory improvements.
The year 2024 was a success for the pension funds. Thanks to positive developments on the capital markets, an average net asset performance of 7.4 % was achieved. Only 0.8 % of the institutions still had a shortfall at the end of the year. Active insured persons also benefited. Their retirement assets earned an average interest rate of 3.76 %, well above the statutory minimum interest rate of 1.25 %.
Market risks remain
Despite the positive outlook for 2024, OAK BV urges caution. Market distortions due to geopolitical tensions are already weighing on the current year. It therefore remains essential to build up and maintain fluctuation reserves in order to cushion potential losses and stabilise the system in the long term. A stress test carried out shows that the pension funds are currently well positioned.
Focus on collective and joint schemes
The Supervisory Board continues to focus on collective and joint schemes, which look after around 75% of active insured persons. In this heterogeneous structure, the OPSC sees risks due to conflicts of interest, competitive pressure and insufficient reserves in the event of rapid growth. New guidelines on the distinction between interest and benefit improvements and on transactions with related parties are intended to increase transparency and stability.
The next development step
In addition to ongoing supervision, the OPSC BV is providing impetus for the further development of the system. A more standardised supervisory practice, clearer rules for brokerage and auditing as well as a risk-oriented reporting obligation should make the system fit for the future. The evaluation of the LOB structural reform will show where there is a need for legislative action.
Robust system, remain vigilant
Occupational pension provision in Switzerland is solid and resilient at the end of 2024. But the challenges remain. Long-term security can only be guaranteed with consistent supervision, structural development and a clear focus on the interests of the insured.