Dear fund members,

Details of the performance of our pension fund are set out below:

2021 annual financial statement

The Board of Trustees approved the 2021 annual financial statement of our pension fund at its meeting on May 30, 2022. Our pension fund achieved an investment performance of 9.6% in the 2021 fiscal year. As at December 31, 2021, the coverage ratio increased from 123.1% to 124.8% following interest of 8.5% on the pension assets.

The key performance indicators for 2021 are listed below:

• Total assets: CHF 720.56 million (2020: CHF 631.65 million)
• Fluctuation reserve: CHF 124.12 million (2020: CHF 109.44 million)
• Uncommitted funds: CHF 17.36 million (2020: CHF 6.46 million)
• Number of active fund members: 1’413 (2020: 1,434)
• Number of pension recipients: 188 (2020: 173)

Mortgages and directly held properties were successfully expanded again in the 2021 reporting year. Our pension fund has properties in Aesch, Itingen, and Riehen. Regarding mortgages, we look set to reach the target allocation of 10% of investment assets by the end of 2022. Consequently, mortgage origination has been stopped until further notice.

Outlook for 2022

The current global political situation and soaring inflation in the USA and many European countries are currently having a negative impact on the investment markets. As a result, our pension fund achieved an investment performance of -6.55% as of 31 May 2022. This leads to a decrease in the coverage ratio from 124.8% to approx. 114%. Our pension fund is in a financially sound position. It has sufficiently high fluctuation reserves to cushion negative investment performance. Our pension fund's Investment Committee is monitoring this development very closely with the assistance of external investment advisors. Appropriate steps will be instigated if necessary.

Shared contribution model for pensions

Last year, the Board of Trustees decided to introduce a shared contribution model for pensions and partner pensions. The Board of Trustees believes that now is the ideal time to introduce this model, as our pension fund has sufficiently high fluctuation reserves. The shared contribution model is based on the following key criteria:

• Not all pension age groups have contributed equally to the accumulation of the fluctuation reserves. Therefore, each pension age group has to be assessed individually. The pension year group is determined by the retirement date.
• An “interest barometer” is set for each pension age group. It is calculated on the basis of the pension fund’s performance trend, the interest return on the pension assets in the five years before retirement, and the promised interest from the conversion rate.
• If this interest barometer is positive, there is a right to one-off additional capital. In the main, pensioners are granted this credit if they were active fund members and the interest on their pension assets was low compared with the investment performance in the launch phase of the pension fund, and they therefore made a significant contribution to the accumulation of the fluctuation reserve.

Further details on the calculation of the interest barometer can be found here.

These capital payments from the shared contribution model will be paid to the eligible pensioners for the first time this year (provisionally at the end of June). The pensioners concerned will be duly informed in June.

Change to the asset management mandate including global custodian

The Board of Trustees has decided to transfer the asset management mandate including global custodian from Credit Suisse to Zürcher Kantonalbank (ZKB). ZKB came out on top in terms of quantitative and qualitative criteria in our assessment of providers and their offerings. We will communicate the new account details in due course.

Adjustment to the pension fund regulations

The Board of Trustees added further clarifications to the pension fund regulations as at June 1, 2022. In addition, there is now the option of separate payout of purchases from previous pension schemes in the event of death. To enable this, any relevant purchases from previous pension schemes by the fund member in their lifetime must be indicated to our office in writing and documented. For the applicable documentation, please get in touch with our contacts at Kessler Vorsorge AG directly.

If you have any questions, our contacts at Kessler Vorsorge AG and the members of the Board of Trustees will be happy to help.

Best regards,

Bayer Pension Fund Switzerland