The Swiss Federal Pension Fund PUBLICA recorded a performance of –9.6% in 2022. This was due to turbulence on the financial markets. The consolidated funded ratio stood at 96.2% at the end of the year. PUBLICA began modernising its pension offering last year. Simultaneously with its results, it is publishing its first comprehensive responsible investment report, covering the year 2022. This shows that progress has been made in almost all asset classes.
The turbulence on the financial markets also impacted PUBLICA’s results in 2022. The net investment performance stood at –9.6%, compared with +4.4% in 2021. The biggest negative contributors were bonds and equities, while real estate and precious metals recorded a positive result. The negative performance affected the funded ratios of PUBLICA’s pension plans: in all, 14 of the 18 plans were underfunded at the end of 2022.
Strategic asset allocation adjusted: fewer bonds, more equities and real assets
PUBLICA has adjusted its strategic asset allocation to further increase diversification and the expected return. The relatively high exposure to bonds has been reduced and the proportion of real assets and listed equities raised. The new strategic asset allocation is deliberately being implemented in stages, which will take up to four years for some of the more illiquid asset classes.
Modernisation of pension offering launched
At the end of 2022, PUBLICA was providing services to 67,515 active members and 41,918 pension recipients.
The number of active members rose by 1% (653 people), with nine of the eleven open pension plans recording an increase. The number of pensioners declined by 0.2% (92 people).
PUBLICA is responding to changing lifestyles by making the following changes to its pension offering from 1 January 2024:
- abolishing the distinction between primary and secondary employment among its affiliated employers,
- paying out 100% of the pension assets as a lump sum rather than an annuity in the event of death, if requested by the relatives, and
- introducing a stepless disability pension system.
PUBLICA also plans to merge the closed pension plans with effect from 1 January 2024, in order to balance risks and simplify administrative processes.
Comprehensive sustainability report
PUBLICA is publishing its first comprehensive report on responsible investment, covering the year 2022. Its aim is to create greater transparency and explain what PUBLICA means by responsible investment and where progress has been made. The report is based on the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), the Swiss Climate Scores developed by the Federal Council, and the ESG reporting recommendations laid down by the Swiss Pension Funds Association ASIP.
PUBLICA employs various approaches to responsible investment. In 2022, for example, it
- fulfilled its responsibilities as a shareholder and completed a three-year dialogue with seven chocolate manufacturers to improve the situation regarding child labour on cocoa plantations,
- optimised its climate-efficient equity index and took account of companies’ Scope 3 emissions for the first time when calculating greenhouse gases, and
- took the decision to exclude further companies that produce coal and generate electricity from coal.
