Key Figures

Statistical Data

Let us start with some statistical data on Novartis Pension Fund 1 as reported in the actuarial statement: On 31 December 2018, there were 12'530 (previous year: 12'601) actively insured members compared with 15'501 (previous year: 15'839) retirees, of whom 9'940 had reached retirement age, 381 were drawing a disability pension, and 4'786 were drawing a widow(er)’s pension. Orphans’ and children’s pensions accounted for a further 394 current pensions. The average current pension income amounted to 40'577 (previous year: 40'549) francs.

 

Coverage Ratio

The funding ratio is computed as the ratio of tied assets to free assets. Based on the statutory method of  declaration in accordance with art. 44 para. 1 BVV2, the funding ratio amount ed to 108.5 percent. This means that the fluctuation reserves dropped below their target level and that the capacity of Novartis Pension Fund 1 to manage financial risk is therefore restricted. At the same time, there are no further free funds available. Also reflected in the funding ratio are the substantial increase s of the actuarial reserves for  pensions over the past years (most  recently, by year­end 2017, the actuarial discount rate was adjusted to 2.0%) and the provisions set aside for financing com­pensation credits in the context of the conversion rate adjustments enacted in January 2016. With all these measures, due account was taken of the persistent low interest rate levels and the continuously rising life ex­pectancy.

 

Performance

The fourth quarter 2018 was marked by uncertainty about global economic growth, geopolitical uncertain­ties and the fourth interest rate hike by the US Fed in the past year. The European Central Bank ended its bond purchase program at the end of the year. Instead of the hoped-­for year­-end rally, the losses on the stock markets that occurred towards the end of September continued to widen. Due to rising interest rates and low spreads on corporate bonds, bond investments re­mained under pressure.

Overall, with negative contributions from most asset classes with the exception of real estate, the YTD per­formance for Pension Fund 1 was down –3.21%, lagging the benchmark (–2.93%) by 28 base points.


Are you interested in further information?

The detailed annual report can be obtained from the Pension Fund Administration:

+41 61 324 24 20
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