Vita Joint Foundation: Annual Report 2019

Vita Joint Foundation: Annual Report 2019

2019 was in many respects a record year: the equity markets reached high record levels while bonds experienced new record lows with their interest rates. Vita Joint Foundation concluded the financial year with a performance of 8.66%. The cover ratio as of December 31, 2019 was 104.3%.

Vita Joint Foundation is one of the biggest joint and community institutions in Switzerland, with a balance sheet total of over CHF 16 billion. In 2019, the number of affiliated companies grew by 755 to 22,583; the number of the insured also increased by 9.2% and is now 141,385. "Our size has a positive effect on the security and stability of the foundation," noted Werner Wüthrich, managing director of the Vita Joint Foundation.

A solid position for the future

As of December 31, 2019, Vita Joint Foundation lowered the technical interest rate to 1.75%. Admittedly, this does have a negative short-term effect on the cover ratio, but in the long term it will improve the stability of the foundation, since the pension obligations are evaluated with an economically realistic interest rate. Vita Joint Foundation has taken a stand against the unsupportable redistribution from young to old with the moderate lowering of the conversion rate, which was already announced last year.

Constant good interest earned on retirement assets

The beneficiaries of the Vita Joint Foundation have benefited from above-average interest earned on their retirement assets in recent years. The Vita Joint Foundation returns its investment income, staggered over five years, to its beneficiaries, based on the cover ratio as of October 31. The target coverage ratio of 106% was not achieved in the 2019 financial year as the condition for forming a new interest reserve. However, the beneficiaries do profit from the interest tranches of previous years. The maximum interest earned on the retirement assets in 2019 was 2.40% in the mandatory insurance and 2.65% in the super mandatory part.

Most important key figures in 2019

Affiliated employers 22,583
Active members 141,385
Pensioners on own balance sheet 4,010
Assets in CHF million 16,247
Return on asset investments 8.66%
Coverage ratio I (Art. 44 Abs. 2 BVV2) 104.3%
Max. interest earned on mandatory savings capital 2.40%
Max. interest earned on super-mandatory savings capital 2.65%
The amount of interest credits is dependent on date of joining the foundation.