What is your second pillar/pension fund performance?

Baptiste Wicht

Baptiste Wicht

The Poor Swiss
Staff member
Hi,

I thought it would be interesting to compare the performance of different pension funds to get an idea of what happened in the market.

For 2025, my pension fund (AXA) delivered the following interest rates:
* 5% for the mandatory part
* 6% for the extra-mandatory part

What about you?
 
Last edited:
gaijin said:
Do you mean the yearly interest that is distributed to the employees? Other than that, I don't think pension funds directly distribute any other performance gains.
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Yes, the interest rate that gets distributed at the end of the year.
 
Yesterday, the Commission de haute surveillance de la prévoyance/Oberaufsichtskommission Berufliche Vorsorge (at the time of the publication of this post, their website had a 404 error) published their yearly report on the status of the pension funds in Switzerland. Based on the corresponding article in the NZZ, the most important points:
  • The Deckungsrade (i.e. the reserves) increased to 117,1%. Additionally, the Wertschwankungsreserven (another form of reserves) have also increased. In general, this is a good thing since it makes it possible to continue payouts when the investment returns are low. Of course, there is a risk that pension funds accumulate too high reserves which would result in too little payouts.
  • The average net investment performance was 6.1%
  • Average interest paid to workers: 4.33%
  • The number of pension funds in Unterdeckung (i.e. Deckungsgrad lower than 100%) has decreased to 12 pension funds.
  • The Umwandlungssatz was lowered to an average of 5.17%.
  • Average investments: 32,9% in stocks, 32% in bonds and mortgages, 22.3% in real estate, 6.9% in alternative investments (hedge funds and private equity) -> 32.9% stocks seems amazingly low to me.
There is one point that I would like to shed a light on:
Positiv zu werten ist zudem, dass die Pensionskassen das langjährige Dauerthema der Umverteilung von aktiven Versicherten hin zu Rentnern in den Griff bekommen haben. In den letzten fünf Jahren hätten Schätzungen keine signifikante Umverteilung mehr gezeigt, heisst es weiter.
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One reason is the high performance in the last few years. Since the annuities of retirees are fixed, a high performance benefits primarily the workers. There is a redistribution from retirees to workers.
However, another reason is that the Umwandlungssatz was lowered. This means that new retirees receive a lower annuity while the annuities of the existing retirees remain untouched. In my opinion, this. still constitutes a clear redistribution from workers to retirees.
In summary, a redistribution could only stop if a change to the Umwandlungssatz as well as the payout of the yearly performance would be applied to workers and to retirees.
 
Very interesting points, thanks for sharing.

I think there is one important point that many people do not consider: while we can be happy about the current state, we should be careful about the next few years. The stock market is eventually going to go into a major bear market. And I am not entirely convinced that all pension funds are well prepared for that. Distributing a lot of the returns is good, but getting some protection is good as well.
 
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