Thursday, July 26, 2018

Swiss government warns of fire sale to fund first pillar payouts

Is this a precurser for other funds as well?  Will this be the trigger to the next downturn?   Aivars Lode

Switzerland’s first-pillar pension fund could be forced to sell off millions in assets per month to finance pensions if no long-term funding solution is found, the country’s government has warned.
The Swiss first pillar fund AHV/AVS is expected to amass a CHF43bn (€37.2bn) deficit by 2030, in a ‘worst-case’ scenario assuming no return on investments.
To ensure all pension payouts are met by then, the fund needs CHF53bn, the government said in a press release about a consultation on first-pillar reforms.
“Successful measures to ensure the stability of the AHV/AVS fund are urgently necessary,” the government stated. “Without them the fund would have to sell of assets worth CHF100m per month to be able to meet the pension payments.”