Pension fund assets in 2021: 3rd contributor contributes CHF 85 billion

In 2021, the assets in Swiss pension funds grew to around CHF 1,200 billion. The 3rd contributor, the return on the accumulated capital stock, made the largest contribution to this growth. Last year was no exception: statistically speaking, the third contributor is the main pillar of Swiss pension provision, as the Asset Management Association Switzerland states in its new report.

The above-average investment year 2021 had a very positive impact on the financial situation of Swiss pension funds. The average net return of 8.0 per cent alone contributed CHF 85 billion to pension fund assets, which have thus grown to a total of around CHF 1,200 billion. This performance by the third contributor, the return on the accumulated capital stock achieved on the capital markets, is the second-best result in the history of occupational pension provision, as the Asset Management Association Switzerland (AMAS) states in its report "The third contributor: the mainstay of Swiss pension provision". This vividly illustrates the high and often underestimated relevance of the third contributor in occupational pension provision.

Switzerland is one of the world leaders in terms of pension fund assets per capita. Nevertheless, there is a need for reform in the Swiss pension system due to demographic trends and the persistently low interest rates on the capital market. A political solution to the structural problems in occupational pension provision is still awaited.

Over the last 15 years, the return on the accumulated capital stock has led to an average annual increase in assets of CHF 30 billion, at average asset management costs of 0.45 %.

This means that around 40 % of pension fund assets come from the third contributor. In view of the interest rate environment, there has been a trend in pension funds over the last 10 years away from bonds in favour of more equities, real estate and other high-risk and high-return investments.