Operational implementation of Asset Management


Calculation of social benefit schemes

The popular vote of 27 September 2009 in favour of the reorganisation of the disability insurance scheme also sought to improve the transparencyof the accounting systems of all social benefit schemes.The resulting breakdown of separate accounting systems for AHV (old-age pensions), IV (disability insurance) and EO (loss-of-earnings benefits),that has been in effect since 1.1.2011, allows for the correct long-term allocation of funds to each of the social benefit schemes and takesaccount of the different legal situations and development prospects.

The diverging financial prospects require a separate risk evaluation for the investment process of each social benefit scheme, which will leadto three different risk and asset allocations. The estimates conducted by the Federal Social Insurance Office (BSV) are repeated annually.New realisations and pro-jections contribute to the definition of the asset allocations.The new investment prospects are regularly published on the Internet for the public.


Centralised asset management

In accordance with a legal directive, the assets of the three schemes are administered in a common pool to avoid excessive costs and make for easier auditing.For all forms of investments (shares, bonds, etc.) there are investment modules (known as Managed Accounts),which are managed by internal and external trustees in accordance with clear criteria.Shares in the investment modules are, for bookkeeping purposes, assigned to each social benefit fund by investment profile and asset volume.

In order at any time to guarantee the liquidity requirements as well as efficiently steer the risk, there is a separate money-market pool (fund),in which each social benefit scheme is invested in accor-dance with its asset allocation.All of the social benefit schemes' receipts and disbursements are also conducted via this pool (cash management).


Risk management

The investment profile of each social benefit scheme is continuously supervised and adapted to the constantly changing risk estimates.In order that the risk budget remain within the agreed range, it is necessary from time to time to reallocate funds among the various types of assets.In addition, each social benefit scheme transacts purchases and sales within the underlying investment modules and the money-market pool.This ensures that the desired percentage ratio per investment class is reestablished.

A central measure for risk evaluation is nervousness on the financial markets, which can be observed from daily fluctuations.For example, if upward and downward price variations become more marked, or more volatile,risky securities such as shares are reduced in all social benefit schemes.Thus the risk budget per social benefit scheme, the so-called target volatility, is again kept within bounds.



Asset allocation

Permissible bandwidth
Swiss franc loans	5.0 %	-	15.0 %
Swiss franc bonds	7.0 %	-	17.0 %
Foreign currency bonds	38.0 %	-	48.0 %
Equities	17.0 %	-	27.0 %
Real estate	7.0 %	-	13.0 %
Precious metals	0.0 %	-	4.0 %
Cash and other tactical investments	0.0 %	-	5.0 %

The currency risks associated with the investments are to a large extent hedged.