The assets of LPP policyholders could be better remunerated in 2024

Good news for occupational pensions. The year 2024 was once again favorable for Swiss pension fund investments. The average net return on their assets was 7.4%, better than in 2023 (5.2%). As a result, coverage rates calculated at the end of 2024 climbed to an average of 114.7%, compared to 110.3% a year earlier, the Higher Supervisory Commission for Occupational Pensions (CHS PP) announced on Tuesday.

Some pension funds have thus been able to recover. Indeed, only 0.8% of pension funds were overdrawn at the end of 2024, compared to 7% in 2023. Now, more than 99% of them have a coverage rate of at least 100%.

Active policyholders are benefiting from this favorable situation, the CHS PP also notes. This is because it has allowed for an increase in the average interest rate on their retirement assets, which rose from 2.31% at the end of 2023 to 3.76% at the end of 2024. "A large portion of pension capital was remunerated at a rate exceeding the minimum LPP rate of 1.25% in 2024," the commission emphasizes.

However, there's no reason to rest on one's laurels. Institutions must continue to act with caution, given the introduction of customs surcharges applied by the United States, which caused market turbulence during the first months of the year, the commission notes. This turbulence could cause financial losses for the funds, it warns. "If the 2025 financial year ends with negative results, they will be forced to draw on their reserves," it concludes.