It remains difficult to achieve the necessary rates of return. The prerequisites for an inflation adjustment on pensions are not in place.
Financial situation
The development of the investment markets from the beginning of the
year until May was "pleasing to good". Then June proved to be a poorer
month for investments where Swiss pension funds are concerned. Pension
funds have lost more than 2% in value. The expansive monetary policies
of the central banks and possibly also the conflict in Syria
increasingly set back the opportunities available on the capital
markets. Therefore, it remains extremely difficult for pension funds to
achieve the necessary rates of return. At the end of August, the cover
ratio before payment of interest on retirement assets stood at 103.6%,
whereas the rate of return achieved stood at 0.74%.
No pension increase in 2014
Even with a cover ratio of around 104%, it is not possible to grant an
inflation adjustment. Because the target is a cover ratio of 115%
(dependent on the portfolio strategy). In addition, the average rates of return since Vorsorge RUAG came into existence up to today are not
adequate to cover the payment of interest on the pension capital
according to the technical interest rate. Currently, interest is being
paid on the pension capital at a rate of 3%. Previously this was 4.0 or
3.5%. This means that the pensions paid out already include benefit
enhancements that are over the increase. However, the retirement assets
of those actively insured had to have interest paid on them at lower
rates due to the financial situation. In 2011 for example at 1.0% and
2012 at the minimum rate of 1.5% according to the Swiss Occupational
Pensions Act. The interest rate for the current year (2013) will be set
in December.
Therefore, no free funds will be available before the full
risk-carrying capacity is reached (accumulated value fluctuation
reserve). As a result, the statutory prerequisite to be able to adjust
the old-age, invalidity, spouses' and children's pensions as at 1
January 2014 for inflation is lacking. Should the finances be available
some day, then for the reasons given above, before adjusting pensions
for inflation, a higher rate of interest on the retirement assets of
actively insured parties would be appropriate.
Exit of Berghoff Mechanical Engineering Ltd
With retrospective effect from 1 April 2013, Berghoff Holding GmbH
acquired RUAG Mechanical Engineering AG. Employees will remain insured
with the Vorsorge RUAG company pension plan until 31 December 2013.
Therefore, the changeover to the new pension scheme will take place on 1 January 2014. The Board of Trustees has established that the
prerequisites for a partial settlement have been fulfilled and the
necessary steps for a smooth execution completely in line with relevant
regulations have been introduced.