All asset classes, with the exception of foreign real estate and private infrastructure equity, performed positively. As a result, PUBLICA recorded positive returns on both strategic asset allocations in the 2023 financial year. The closed pension plans, which have a 10% equity allocation, posted a performance of 4.7%, while the open pension plans, with an equity allocation of approximately 30% over the year as a whole, recorded a figure of 3.8%. The main reason for the superior return achieved by the closed pension plans is their higher allocation (60%) to Swiss investments. By contrast, the overall portfolio of the open pension plans is more internationally diversified, with Swiss investments accounting for 31%. Swiss bonds and Swiss real estate in particular performed better than their foreign counterparts during 2023. The collective institution’s funded ratio rose to 98.3%. Of the eleven open pension plans, three are still underfunded. PUBLICA made preparations to merge the closed pension plans in 2023 and implemented the merger on 1 January 2024. This will balance risks and simplify administrative processes. PUBLICA’s closed pension plan is made up entirely of pension recipients.
Further progress in responsible investment
PUBLICA is once again publishing a responsible investment report, covering the year 2023. Last year, it prioritised four of the UN Sustainable Development Goals that are relevant to its portfolio: Goals 7 (affordable and clean energy), 8 (decent work and economic growth), 13 (climate action) and 16 (peace, justice and strong institutions). The first measurement against these goals examined equities and corporate bonds, and PUBLICA will now further refine its approach. Also in 2023, PUBLICA began implementing the bespoke ESG benchmark for government bonds, and concluded a dialogue with nine companies. Additionally, it purchased or inaugurated a number of properties in French-speaking Switzerland that meet financial, environmental and social criteria. In 2023, PUBLICA began building a knowledge base on biodiversity. Climate change exacerbates the loss of biological diversity, which in turn accelerates climate change. Measuring biodiversity and assessing the level of decline is highly complex. PUBLICA’s next step will be to review the available measurement approaches.
