98

**Table 43  PF Credit** **<u>Suisse Group:  Early Retirement and Pension Benefits</u>** Retirement Age 62-63 61-62 60-61 59-60 58-59 57-58 56-57 55-56 Monthly Reduction 0.250% 0.250% 0.250% 0.333% 0.417% 0.500% 0.583% 0.667% Annual Reduction 3.0% 3.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Source: Pension Fund of Credit Suisse Group (Schweiz) (2005), p.14

Contrary, if the pension payments are postponed beyond the 65th birthday, the retirement pension will increase by 0.25 percent for each additional month at work. Early retirement _after_ the age of 60 implies a bridging pension, which equals the amount of the retirement pension, but shall not exceed 50 percent of the maximum retirement benefits payable under the AHV/AVS. This bridging pension does not cause any reduction and can be considered as “for free”. In addition, the insured can _purchase_ an additional bridging pension. This purchased bridging pension causes a reduction of the retirement pension (according to the above table). The reduction, which can be compensated, equals to 5 percent of the additional bridging pension . However, the total amount of the bridging pension cannot exceed the maximum retirement pension payable under the AHV/AVS.

Investment: The investment strategy is focused on long–term asset allocation. The Board of Trustees defines a strategic range for different asset classes and the representative benchmark. The tactical investment range for securities (which lies within the strategic investment range) is defined on a quarterly basis. The chief strategy thereby is _Timing_ and _Selection_ . The asset allocation as at 31.12.2004 is the following: Swiss bonds (36.2 percent), direct and indirect real estate (14.8 percent and 4.1 percent, respectively), liquidity (12.5 percent), foreign and convertible bonds (9.3 percent and 1.7 percent, respectively), foreign equities (7.7 percent), Swiss equities (6.5 percent), hedge funds (5.6 percent), and private equity (1.6 percent). The performance of the above assets was 5.1 percent.

# **PF City of Solothurn**<sup>**90**</sup>

_The pension fund of the city of Solothurn is an institution under public law and insures 362 active contributors and 274 retirees. It uses as pension plan a defined benefit system, where the employer contributes 60 percent (i.e., 13.65 percent of the insured wage per annum) and the employee the remaining 40 percent (i.e., 9.1 percent of the insured wage per annum)o. The contributions to term insurance are equal for both parties (i.e., 1 percent of the insured wage per annum). Pension benefits are paid in the form of annuities and reach maximal 60 percent of the last insured wage. The accumulated capital can only be withdrawn as a lump sum for low income levels. The retirement age can be postponed in both directions by 5 years. In 2003, the guaranteed (by the employer!) interest rate on the old–age credit balances was 4.5 percent and in 2004 it was 4 percent (due to the decrease of the technical interest rate from 4.5 percent to 4 percent it was adjusted accordingly). As at 31.12.03, total assets were 108 million CHF and the funding ratio - using 4.5 percent as the technical interest rate - was 83.8 percent. As a consequence of the reduced technical interest rate the funding ratio decreases to78.7 percent._ 90c.f. Pensionskasse der Stadt Solothurn (2005)