Definitive interest on Capital in Pension Plan (incl. ER Account) and Capital Plan 2023

Definitive interest rate for 2023 applied to retirement savings capital in the Pension Plan and ER Account

The Pension Fund Board decided the following at its meeting of 7 December 2023:

1. The ordinary interest rate to be applied to the mandatory and extra-mandatory portions of retirement savings capital in the Pension Plan and the ER Account shall be 1.5% with retroactive effect from 1 January 2023, matching the 1.5% interest rate currently guaranteed on the retirement savings capital for pension beneficiaries.    
2. The provisional funding ratio as at 30 November 2023 also allows redressing some of the redistributions from insureds to pension beneficiaries in recent years without undermining the long-term financial stability of the Pension Fund. A compensatory interest rate of 3.5% shall be applied to the mandatory and extra-mandatory portions of the retirement savings capital in the Pension Plan and the ER Account for 2023. This permitted honouring, in 2023, the Pension Fund Board's commitment to set future interest rates with due regard to the inequity afforded to different generations through past de-risking measures.

Insureds and beneficiaries of salary replacement benefits or a temporary disability pension

The 1.5% ordinary interest rate and the combined 3.5% compensatory interest rate apply to all those who were insureds (meaning active, non-retired members) on 31 December 2023 as well as all members who were drawing salary replacement benefits or a temporary disability pension on 31 December 2023. Members who joined during 2023 will receive both the ordinary and compensatory interest rates applied pro rata. The total interest amount is credited to the retirement savings capital on 31 December 2023.

Definitive interest rate applied to savings capital in the Capital Plan for 2023

The Pension Fund Board confirmed the interest rate to be applied to savings capital in the Capital Plan for 2023 will remain at 0%.

Insureds benefit from a capital interest rate guarantee for the Capital Plan. This means that when the Capital Plan is paid out (for example upon leaving the company, retirement, death, 100% disability), the insureds receive at least their contributions and buy-ins plus any interest awarded by the Pension Fund Board (calculated over the entire membership period). Furthermore, they can benefit from the performance of the "UBS AST2 EA Kapital Plus 2019" fund. In the event of benefits being paid out, insureds will always receive the higher of the two amounts – the value of the savings capital or the value of the fund units. This means that insured members have no risk of loss due to price falls but can enjoy 100% of price increases.

Interest rate to be applied during the year to retirement savings capital in the Pension Plan (incl. ER Account) for 2024

Due to the uncertain economic outlook as well as the high volatility on the capital markets, the Pension Fund Board will retain its cautious interest rate approach for 2024. At its meeting of 7 December 2023, the Board therefore decided to set the interest rate to be applied during the year to retirement savings capital in the Pension Plan for 2024 at 1.25%

Interest rate to be applied during the year to savings capital in the Capital Plan for 2024

Due to the capital guarantee, the Pension Fund Board decided to set the interest rate to be applied during the year to savings capital in the Capital Plan for 2024 at 0%.