compenswiss finished 2023 with a positive investment result of 4.98%. After a result of −12.85% the previous year, this represents a pleasing turnaround.

In an environment increasingly marked by geopolitical tensions and confrontations, the financial markets have been impacted by several factors such as military security and the challenges of food, energy, and information technology. Artificial intelligence (AI), with its promising potential applications in fields as diverse as education and medical imaging, has attracted widespread interest.

Under ongoing pressure from inflation, central banks in many countries were forced to perform a balancing act and raise interest rates to levels that were too high to enable strong economic growth. The ratio of total indebtedness to GDP in certain countries also remains a concerning risk factor.

Between recession and resilience, investors adapted to capital markets that were always volatile in 2023.

Against the backdrop of the global economic situation as well as the takeover of Credit Suisse by UBS supported by the authorities, the Swiss economy’s growth of 1.3% is to be considered positive. Despite the additional challenges posed by the appreciation of the Swiss franc, it has proved resilient, albeit below last year's level (2.5% in 2022).

Net performances of the different types of social insurance

Throughout the reporting year, the various asset classes experienced significant fluctuations. Bonds, equities and real estate funds once again came under heavy market pressure in the third quarter of 2023. In addition, the high liquidity requirements of compenswiss only permit a limited proportion of long-term investments such as direct real estate investments.

Despite this difficult environment, the net returns of the different types of social insurance are 4.81% for OASI, 4.76% for InvI and 4.9% for the LEC.

InvI’s liabilities to OASI remain unchanged at CHF 10.28 billion.

The total assets managed by compenswiss as per 31 December 2023 increased to CHF 40.62 billion (previous year: CHF 37.28 billion). This increase includes the investment result of 4.98% and the positive operating result of CHF 1.45 billion. Almost half of these assets are managed internally. In 2023, as always, pension payments were guaranteed at all times.

OASI 21 and pension development

To ensure the sustainability of the OASI in the medium term, the Swiss people accepted the OASI 21 reform in September 2022, which will reduce the burden on the OASI fund over the next few years. In March 2024, two popular initiatives will be put to the vote: "Better Living in Retirement (Initiative for a 13th OASI pension)" and "Promoting safe and sustainable pensions (pensions initiative)". The results of these two referendums will have an impact on the future financing of the OASI fund.

 Responsible investment

compenswiss is convinced of the importance of taking sustainability into account in order to achieve a risk-adjusted return in line with the market. Its strategy is based on four main axes: exercising voting rights, shareholder dialogue, exclusions where necessary and incorporating ESG. As a public agency that is independent from central government, its legal mandate is to retain sufficient liquidity at all times and to invest its assets in such a way as to ensure the best possible relationship between security and achieving a market-compliant return. These legal objectives define the mission of compenswiss.

In the context of developing a responsible investment strategy, the Executive Committee proposed new ways of decarbonising the portfolio to the Board of Directors. In May, the Board agreed to exclude companies with a turnover from coal above a threshold of 15% which do not have a sufficiently ambitious decarbonisation approach (Low Carbon Transition Score). At the same time, it also accepted an updated list of companies subject to standard exclusion factors.

The Swiss Climate Scores (SCS), introduced by the Federal Council in 2022, aim to increase the transparency of the climate impact of financial investments through six indicators in order to promote investment decisions that contribute to achieving the goals of the Paris Agreement. These indicators have already been incorporated into the sustainability measures of compenswiss and will therefore make it possible to easily calculate the SCSs of the market portfolio.

compenswiss is a joint signatory of the Swiss federal government’s energy-saving alliance, which has over 180 partners from business, civil society and government. Its members join the campaign and commit to taking their own measures.

Activities of the Board of Directors and its Committees

In the reporting year, the Board of Directors focused particularly on the “Global custody and fund administration” request for proposals and on the selection procedure for the financial institutions to be considered. The other main topics addressed were adapting the regulations (Investment Committee, Audit and Personnel Committee, Executive Committee regulations), the annual asset allocation and the setting of the interest rate to be applied to the InvI’s liabilities to OASI from 2024. In the context of introducing new first pillar accounting standards (IPSAS), interest cost and income linked to InvI’s liabilities will be an integral part of the investment results of both OASI and InvI from 1 January 2025.

Like every year, the Investment Committee dealt with the annual asset allocation and defined the detailed allocation for 2024, as well as analysing market developments.

In accordance with its mandate, the Audit and Personnel Committee examined issues relating to external and internal audit, regulatory aspects and human resources.

Photo: Patric Pop

Board of Directors
From left to right: Hans-Ulrich Bigler, Urs Eggenberger, Gabriela Lenherr, Bruno Parnisari, Sandra Gisin, Cristina Maderni, Ruth Meier, Manuel Leuthold, Roland A. Müller, Philippe Augsburger, Gabriela Medici, Adrian Wüthrich, Michaela Troyanov

Operations and resources

To further increase efficiency and resilience, the Executive Committee is pursuing a four-pronged strategy: ensuring competitive asset management, adapting the institution’s organisation to a constantly evolving environment, controlling a multichannel communication strategy and continuing to develop the human resources policy in accordance with the values of compenswiss. Progress was made in all areas during the past financial year thanks to substantial efforts. Due to the revision of the Data Protection Act, the newly stipulated role of data protection officer has been filled within the Management Office.

Interactive training modules on information security, as well as campaigns to raise awareness and continuing education on subjects such as combating fraud and data protection, were organised for employees throughout the year. Four working lunches on topics linked to diversity were an opportunity to implement the values of compenswiss and foster collaboration.

The ratio of operating costs to assets remains low at 0.11% (2022: 0.12%). Taking into account the costs included in the investment result (stamp duty, management fees for external funds, performance fee), this ratio rises to 0.19% for 2023 (2022: 0.20%). The annual budget was adhered to.

As of the end of 2023, compenswiss employed 63 members of staff or 59 FTE (2022: 61 people or 57 FTE).

Changes in the Board of Directors and acknowledgements

compenswiss would like to thank Sandra Gisin for her outstanding commitment throughout her twelve years of service on the Board of Directors, including ten years as Vice-Chairwoman and as Chairwoman of the Audit and Personnel Committee. She left the Board of Directors as of 31 December 2023. We would also like to thank Gabriela Lenherr for her invaluable contribution. She also reached the maximum term of office on 31 December 2023, after spending twelve years on the Board of Directors.

We would like to thank the Board of Directors and all employees for their hard work and unfailing dedication during the past year.

Photo: Patric Pop

Executive Committee
From left to right: Frank Juliano, Gaëlle Barlet, Eric Breval, Marc Pfenninger, Francesca Azzi Price, Vivien Ravel

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