PUBLICA increases the coverage ratio and promotes responsible investing

17 April 2024

The performance of the federal pension fund PUBLICA in 2023 was 3.9 percent. The coverage ratio of the collection facility rose to 98.3 percent. Of the eleven open pension funds, three are still underfunded. For responsible investing, PUBLICA 2023 has prioritized four of the UN sustainability goals, begun to implement tailor-made benchmarks for government bonds from emerging countries and started building knowledge on the topic of biodiversity.

All asset classes with the exception of foreign real estate and private infrastructure investments performed positively. That is why PUBLICA achieved positive returns on the two investment strategies in the 2023 financial year. The closed pension plans achieved a performance of 4.7 percent with an equity share of 10 percent, while the open pension plans with a share share of around 30 percent achieved a performance of 3.8 percent over the entire year. The main reason why the closed pension funds made better returns is the higher proportion of Swiss investments totaling 60 percent. In comparison, the overall portfolio of open pension funds is more internationally diversified, with a Swiss share of 31 percent. Swiss bonds and Swiss real estate in particular performed better last year than those abroad. The coverage ratio of the collection facility rose to 98.3 percent. Of the eleven open pension funds, three are still underfunded. PUBLICA prepared the merger of the closed pension funds in 2023 and implemented it on January 1, 2024. This enables risk balancing and simplifies administrative processes. In the closed pension scheme, PUBLICA only looks after pensioners.

Responsible investing continues to advance

PUBLICA is again publishing a report on responsible investing for 2023. Last year, PUBLICA prioritized four of the UN sustainability goals that are relevant to the PUBLICA portfolio. These are Goals No. 7 (affordable and clean energy), 8 (decent work and economic growth), 13 (climate action), 16 (peace, justice and strong institutions). PUBLICA carried out the first measurement along these four goals for stocks and corporate bonds and will now further develop the approach. Further examples from 2023 include the tailor-made ESG benchmark for government bonds, which PUBLICA has started implementing, and the conclusion of the dialogue with nine companies. PUBLICA has also purchased several properties in western Switzerland. put into operation that meet financial, ecological and social criteria. In 2023, PUBLICA started building knowledge on the topic of biodiversity. The issue is strongly linked to climate change: this exacerbates the loss of biodiversity, which in turn accelerates climate change. Measuring species diversity and biodiversity loss is very complex. In the next step, PUBLICA wants to examine the existing measurement approaches.

Source: The Federal Council