VORSORGE UPDATE
Retirement assets will be credited with 1.5% interest in 2019. The first three quarters of this year were characterised by interest rates that continued to fall and positive share prices.
Financial situation
The interest on Swiss Government Bonds with a
10-year term have dropped since the beginning of the year from minus 0.15% to a
record low of minus 0.98% in August. They recovered slightly in September with
a rise to minus 0.76%. The interest situation for pension funds is still
critical. In any event, the current environment means we can conclude that
interest rates will continue to remain low. As a consequence of the drop in
interest rates, the market value of bonds has risen, which is a main
contributor to the total return of 9.08% as at the end of October. Shares and
real estate have contributed 3.5%. The coverage ratio rose from 101.1% at the
end of 2018 to 106.6% as at 31 October 2019.
Interest in 2019 and interest rate
during the course of 2020
In spite of a pleasing rate of return of 9.08% at the
end of October and a correspondingly higher coverage ratio of 106.6%, the
structural risk-carrying capacity is not fulfilled. This can only be achieved
with a target coverage ratio and adequate value fluctuation reserve of 117%.
With 1.5%, the Foundation Board nevertheless specified an interest rate that
lies above the minimum OPA (Occupational Pensions Act) rate of 1.0%.
Events throughout the year, such as withdrawals and
retirements, will be credited with interest in the year 2020 at a rate of 0.4%,
just like the previous year.
Collective foundation
The unbundling of the RUAG Group necessitates a new
organisational and structural direction from VORSORGE RUAG as the collective
foundation. In this respect, the Foundation Board approved both the foundation
certificate and affiliation agreements, as well the rebranding and image of the
collective foundation.
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Our offices will be closed from 23 December 2019 up to and including 5 January 2020.
We wish you a joyous festive season.