Information on Baloise Perspectiva

Coverage ratio

The coverage ratio of a pension fund shows the extent to which the sum of all its benefit obligations (pension and lump sum payments) is covered by the available pension assets. In principle, the premiums are calculated in such a way that all obligations are covered. But the assets are invested in the capital market and due to the fluctuations in prices, these investments can lose or gain in value. If its obligations are covered by more than 100 percent, the pension fund is in a so-called overfunding, and if it is less than 100 percent, it is underfunded.

Overfunding

In the event of an overfunding, the surplus capital can be distributed to the insured persons as interest or remain in the collective foundation as a buffer, known as a value fluctuation reserve.

Underfunding

A minor, short-term shortfall is no cause for concern: it has no impact on insured persons’ individual pensions. Advance withdrawals, terminations of employment and retirements will continue to be carried out in full without any restrictions under an ongoing contract of affiliation with the employer.

However, if the employer terminates their contract of affiliation with an underfunded pension fund, the actuarial reserve is reduced by the degree of underfunding. The new pension fund therefore receives less capital and the insured persons are allocated less in the way of retirement assets. The employer can voluntarily make up this loss.

The foundation can only take measures to remedy the shortfall jointly (i.e. involving employers, insured persons and pension recipients) in the event of a so-called substantial shortfall. The supervisory authority is informed about the implementation of the measures at regular intervals.

Conversion rate

The conversion rate is a fixed percentage rate used to convert the retirement assets saved, including interest, into a lifelong, annual retirement pension.

These rates differ for men and women due to their different life expectancies and circumstances.