Switzerland’s pension fund professionals believe the currency turmoil and the negative charges have created critical problems for a retirement system already under strain. Some suggest Swiss pension schemes will be bankrupt within ten years as a result.
This is despite the fact that, by international standards, Switzerland’s occupational pension system is relatively robust; most of the country’s occupational schemes have an enviable asset to liabilities ratio of around 115%.
Yet Swiss pension fund managers have become increasingly nervous about their ability to maintain that ratio in the past 12 months, largely because they are legally required to pay retirees an annuity equivalent to 6.8% of their total savings on an annual basis.
