News from the Board of Trustees, 15 November 2019

Current performance (PF only: since 1 January 2019, the 1e solution with individual choice of investment strategy has applied at the SIP)

In October, the PF generated a return on investments of 0.37%. The accumulated result from January to October 2019 thus amounts to 9.48%.

Threshold amounts in 2020

The threshold amounts will not change as at 1 January 2020. The fact sheet specifying the figures applicable as of 1 January 2020 will be available on the Internet in early January 2020.

Interest rates in 2020 / pension adjustments

In 2020, the Federal Council’s BVG minimum interest rate on 2nd pillar savings capital remains at 1.00%. The Board of Trustees has also decided on a 1.00% interest rate on savings capital in the PF in 2020. The projected interest rate will likewise remain at 1.00%.

Pensions will not be adjusted as at 1 January 2020.

Adjustment of the technical interest rate

The Board of Trustees has resolved to lower the technical interest rate from 1.50% to 1.00%. This interest rate is used to discount the Pension Fund’s future obligations (e.g. pension payments) to the amount necessary today. The new interest rate will apply for the first time in the annual accounts as at 31 December 2019.

Reduction of the conversion rate

The continuous rise in life expectancy and persistently low interest rates on the capital markets put the conversion rate under increasing pressure. The Board of Trustees has therefore resolved to lower the rate. The following conversion rates apply at the age of 65:

2020 5.45% 2021 5.25% 2022 5.00% 2023 4.90% as of 2024 4.80%

A further reduction of the above conversion rates in consideration of the situation on the financial markets and the financial and/or structural situation of the Pension Fund cannot be excluded.

The next meetings of the Board of Trustees will take place on 17 April 2020.