2015 Annual Report. GEMINI Collective Foundation

Transcription

1 2015 Annual Report GEMINI Collective Foundation

2 The English edition of the 2015 GEMINI Collective Foundation annual report has not been submitted to the supervisory authority. The original version in German language is legally binding in all cases.

3 Contents Foreword 5 Collective Foundation 6 Employee benefits units 11 Investment of assets 13 Balance sheet 14 Income statement Auditors report 45 GEMINI Collective Foundation 2015 Annual Report 3

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5 Foreword Review of a challenging 2015 The year 2015 was shaped by geopolitical and economic uncertainties. The monetary policy of the central banks also continued to exert a major influence on the financial markets. Right at the start of the year the Swiss National Bank surprised the markets with its decision to abandon the minimum exchange rate of the franc against the euro. The US Fed carried out an initial interest rate hike shortly before Christmas. Speculation about a Greek exit from the EU and China s growth worries had a negative impact on the markets in the summer and autumn. They recovered again thanks to the expansive monetary policy. The markets closed the year with a moderate result, although in terms of individual annual returns both bonds and equities displayed different signs within their asset groups. However, the Swiss real estate asset group once again gained value in the course of the ongoing expansive monetary policy of the Swiss National Bank. The historically low interest rate level in particular made investments in real estate attractive and their financing affordable, thereby enabling a largely positive return contribution to be achieved. The investment year yielded the most frequently selected GEMINI Pool 20 an average return of 0.67%, while the pools with higher equity components were only just below this. The Foundation happily continued to grow in The pool of insured members increased by 843 to 23,907 beneficiaries. Assets under management are slowly but surely approaching the four billion franc mark. In terms of the claims burden, the employee benefits unit Pensions can look back on a solid year, although investment income remained well below the target return. As a result, the coverage ratio is slightly below 100%. However, GEMINI Collective Foundation has set itself the goal of continuing to expand the sound basis of the employee benefits unit Pensions. The Foundation Board approved the 2015 annual financial statements on 26 April Stefan Sadler took over the general management of GEMINI Collective Foundation from January As long-standing Deputy Managing Director, he offers the best credentials for this position. He is succeeded as Deputy Managing Director by Markus Koch, who previously played an important role in shaping and managing the Sales division. The Foundation Board is continuing to review the positioning as an independent collective foundation and the financial security of the Foundation in the challenging low interest environment. A further focus also lies on the theme of individual investment in assets for members (so-called 1e plans). The key milestones for the launch of this solution have been put in place was a turbulent and stormy year. However, thanks to the commitment and the excellent cooperation with the employee benefits units and their representatives as well as all employees of the administrative office of GEMINI Collective Foundation, the Foundation Board and general management are confident of also staying on target amid the rough waters in Many thanks to all of you. Vital G. Stutz Chairman of the Foundation Board Christoph Oeschger Managing Director GEMINI Collective Foundation 2015 Annual Report 5

6 Collective Foundation Key figures Assets in mchf 3,967 3,818 Employee benefits units Beneficiaries 23,907 23,064 Active members 20,596 19,860 Pensioners 3,311 3,204 GEMINI Collective Foundation continued to grow in the year under review: as at 31 December 2015, GEMINI insured 23,907 beneficiaries, an increase of 3.7%. The trend towards increasing average sizes of the affiliated employee benefits units continued. The average size currently amounts to 62 members (previous year 59). The smallest affiliated employee benefits unit comprised one member and the largest 1,818 (figures for the end of 2015). The proportion of disability pension recipients in relation to active members has even fallen slightly and lies at 2.3% (pre-vious year 2.5%). The good ratio of active members to pensioners was upheld and is an important factor also for offer requests and new affiliations to the Foundation. As at the end of December 2015, the average coverage ratio of all the Collective Foundation s affiliated employee benefits units came to % (previous year %). 6 GEMINI Collective Foundation 2015 Annual Report

7 Collective Foundation Assets in mchf ,967 3,818 3,336 3,110 2,743 2,587 2,474 2,066 2,189 1, ,000 1,500 2,000 2,500 3,000 3,500 4,000 Number of employee benefits units GEMINI Collective Foundation 2015 Annual Report 7

8 Collective Foundation Active members ,596 19,860 18,759 18,149 17, ,000 8,000 12,000 16,000 20,000 24,000 Pensioners , , , , , , , , , , ,400 2,100 2,800 3,500 retired pension recipients disability pension recipients spouse s pension recipients children s/orphan s pensions 8 GEMINI Collective Foundation 2015 Annual Report

9 Collective Foundation Foundation Board The Foundation Board met for six regular meetings in 2015, an investment strategy meeting at the start of the year and a closed meeting in Western Switzerland. In the light of recent events, the impact of the decision by the Swiss National Bank (SNB) to abandon the minimum exchange rate to the euro was reviewed at the investment strategy meeting. As most of the investment categories of the GEMINI pools are hedged against foreign currency fluctuations, the SNB s decision had practically no impact on the return. The upshot of the investment strategy review by an external consulting firm was that GEMINI is well positioned and that there is no need for any action in terms of a strategy adjustment. The focus at the closed meeting in Montreux was placed deliberately on the BVG market in Western Switzerland. The Foundation Board is confident that GEMINI can also grow in Frenchspeaking Switzerland in the next few years. Various Foundation regulations were revised during the year: the investment regulations were changed and implemented as of 1 January The framework regulations were revised and enter into force as of 1 January Furthermore, various adjustments were made to the regulations on partial liquidation and submitted to the Foundation s supervisory authority for a preliminary inspection. For reasons of good governance, the audit mandate was re-tendered as of 1 January The Foundation Board decided to continue the mandate with Ernst & Young but with a new team of auditors. A further focus is on the financial security of the Foundation s portfolio of pensioners that is managed in the employee benefits unit Pensions. Here it can be seen that the conversion rate losses and rising life expectancy in Switzerland are having direct implications for the coverage ratio of the employee benefits unit Pensions. The lack of investment returns is another contributory factor to the fall in the coverage ratio to slightly below 100%. In collaboration with the occupational benefits expert, the Foundation Board has reviewed sustainable measures and will address the issue in more detail once the 2015 annual financial statements are available. The elections to the Foundation Board for the 2016 to 2018 term of office took place in the fourth quarter of In view of the fact that all six members of the Foundation Board stood for re-election, no further candidates stood for office. Based on an amendment to the voting regulations, the Foundation Board was confirmed for another term of office by tacit voting. GEMINI Collective Foundation 2015 Annual Report 9

10 Collective Foundation Investment committee The investment committee among other things dealt with the following issues at its four meetings in 2015: Launch of a short duration bond fund for safely investing the overweighted liquidity and reducing the counterparty risks Restructuring of foreign currency bonds from securitised bonds to pure corporate bonds Review of convertible bonds with three portfolio managers Adjustment of 2015 investment regulations Review of foreign equities exposure with small caps and foreign currency hedging Performance of real estate investments The objectives of the investment committee remain unchanged in 2016: Consistent implementation of the coresatellite approach within fund organisation Index-oriented implementation in the main categories Strategy-oriented implementation with few tactical positionings Continuous monitoring of individual asset managers Administrative office Avadis Vorsorge AG manages the administrative office of GEMINI Collective Foundation. Its tasks include management, administration, consulting, accounts, communication, distribution and coordination of the operational implementation of the investment of assets. The core team of the administrative office consists of around 25 pension specialists. It receives support from other Avadis specialists for various tasks concerning the day-to-day running of the Collective Foundation. At the request of the administrative office, the Foundation Board approved the expansion of the range of services for existing and potential new clients pertaining to individual investments in assets for salaries exceeding one and a half times the upper limit. The project for the implementation of so-called 1e solutions was launched in the year under review. 10 GEMINI Collective Foundation 2015 Annual Report

11 Employee benefits units Coverage ratio and investment strategy The financial situation of the employee benefits units deteriorated slightly in the year under review. Only nine employee benefits units (thanks also to existing employer contributions reserves without right of usage) reported a coverage ratio of less than 100%; they all lie between 95% and 99.99%. At over 61%, the bulk of employee benefits units has a coverage ratio of more than 110%. Coverage ratio of employee benefits units in % < > Selection of investment strategy in % GEMINI Pool GEMINI Pool GEMINI Pool GEMINI Pool Individual GEMINI Collective Foundation 2015 Annual Report 11

12 Employee benefits units Interest In accordance with their financial situation, most employee benefits units ended 2015 with interest on savings capital amounting to the BVG minimum rate of 1.75% or above. Only 4% paid interest at a rate lower than 1.75% and most of these comprised affiliation agreements that had been terminated but not yet fully dissolved in actuarial terms. The development shows that the reserve situation of the employee benefits units has remained stable and that they are assuming their responsibility within the challenging model of GEMINI Collective Foundation. Interest rate decisions in 2015 in % Employee benefits unit Pensions The recipients of retirement and survivors pensions as well as the actuarial reserves of the disability pension recipients of GEMINI Collective Foundation are managed in the employee benefits unit Pensions. Upon the retirement of an insured member, the capital from the affiliated employee benefits unit is transferred to the employee benefits unit Pensions. All benefits are then paid from this employee benefits unit. The financial situation of the employee benefits unit Pensions is constantly monitored by the administrative office and the Foundation Board. The Foundation Board takes measures in the event of underfunding; if necessary, the employee benefits units of the active members must also pay benefits. 4 <1.75% 1.75% 1) 36 >1.75% 60 Interest rate decisions in 2014 in % 1 <1.75% % 1) >1.75% The employee benefits unit Pensions was slightly underfunded at the end of 2015, with the coverage ratio amounting to 99.64%. The reasons for this are the conversion rate losses and the insufficient investment return over the year. The Foundation Board is therefore continuing the restructuring decided on some years ago. A deduction is once again made from the surpluses allocated to the employee benefits units. This affects all employee benefits units that include retirement pensions in their pension plan. The assets of the employee benefits unit Pensions are invested in GEMINI Pool ) The BVG minimum rate in both 2015 and 2014 was 1.75%. Coverage ratio of the employee benefits unit Pensions in % ) ) Following the reduction of the actuarial interest rate from 3.0% to 2.5% 12 GEMINI Collective Foundation 2015 Annual Report

13 Investment of assets Investment strategies of GEMINI Pool 20 Real estate Switzerland 15% Emerging markets equities 2% Foreign equities hedged 7% Foreign equities 6% Swiss equities 5% Convertible bonds 4% Foreign currency corporate bonds hedged 12% 3% Liquidity 25% Bonds CHF 21% Foreign currency government bonds hedged Investment results of the GEMINI Pools GEMINI achieved results in line with the industry average with its four investment pools in The most popular pool, Pool 20, achieved a result of 0.67% as at 31 December Pool 35 and Pool 50 each achieved 0.62% and Pool 0 closed at an impressive 2.05%. By way of comparison, the survey among the members of the Swiss pension fund association ASIP yielded an average return of 0.7% for Pool 35 Real estate Switzerland 15% Emerging markets equities 4% Foreign equities hedged 17% Foreign equities 5% Swiss equities 9% Pool 50 Real estate Switzerland 15% Emerging markets equities 5% Foreign equities hedged 23% Foreign equities 5% Pool 0 Mortgages Switzerland 30% 3% Liquidity 18% Bonds CHF 15% Foreign currency government bonds hedged 10% Foreign currency corporate bonds hedged 4% Convertible bonds 3% Liquidity 14% Bonds CHF 11% Foreign currency government bonds hedged 8% Foreign currency corporate bonds hedged 4% Convertible bonds 12% Swiss equities 5% Liquidity Investment result in % Pool 0 Pool 20 Pool 35 Pool 50 GEMINI Benchmark Pictet BVG 25/40/ These figures refer to the time-weighted rates of return in the GEMINI pools. The capital gains of the respective employee benefits units are calculated individually according to their moneyweighted rate of return. Return of investment categories in % Investment category GEMINI 1) Benchmark 1) Bonds CHF Foreign currency bonds Convertible bonds Swiss equities Foreign equities Real estate Switzerland Alternative investments 2) ) GEMINI including asset management costs, benchmark excluding costs 2) Being wound down, no strategic component since % Bonds CHF Real estate Switzerland 27% GEMINI Collective Foundation 2015 Annual Report 13

14 Balance Assets Notes CHF CHF para. A Investments of assets 3,966,770,597 3,817,391,337 Cash and cash equivalents and money market investments 38,457,919 54,272,977 Withholding tax 14,691 14,691 Current accounts with employers 16,168,687 18,345, Premium accounts with insurance companies 203,593 5,613, Other receivables 11,166,016 12,492, Assets of individual pools 3,900,759,691 3,726,651, Pool 0 33,846,538 38,543,156 Pool 20 2,850,077,135 2,825,500,617 Pool ,622, ,929,264 Pool 50 14,894,492 14,181,011 Individual strategies 672,922, ,235,310 Employer contribution reserves money market fund pool 16,397,118 15,262,501 B Prepaid expenses 103, , Total assets 3,966,873,614 3,817,503, GEMINI Collective Foundation 2015 Annual Report

15 Balance Liabilities and equity Notes CHF CHF para. D Liabilities 67,798,928 70,587, Vested benefits and pensions 64,365,839 67,207,671 Current accounts with employers 2,105,383 2,245,630 Other liabilities 1,327,706 1,134,012 E Prepaid income 2,912,994 3,241, F Employer contribution reserve 75,850,145 73,634, Employer contribution reserve with right of usage 75,652,588 73,249,295 Employer contribution reserve without right of usage 197, , H Pension capital and actuarial reserves 3,427,928,785 3,243,393,810 Pension capital of active members 2,507,654,243 2,362,842, Pension capital of pensioners 831,089, ,653, Actuarial reserves 89,180,202 84,896, Surplus funds 4,657 0 I Value fluctuation reserve of employee benefits units 230,109, ,274,868 J1 Disposable assets of employee benefits units 147,956, ,396,321 J2 Underfundings of employee benefits units -165, ,363 Underfunding -76, , Underfunding with guarantee through employer contribution reserve without right of usage -88, , J3 Value fluctuation reserve of employee benefits unit Pensions -3,072, ,781 J4 Disposable assets of Foundation (equalisation fund) 17,555,330 15,653, Z Status at beginning of period 15,653,046 21,827,236 Income/expenditure surplus 1,902,284-6,174,190 Total liabilities and equity 3,966,873,614 3,817,503,649 GEMINI Collective Foundation 2015 Annual Report 15

16 Income statement Insurance activities Notes CHF CHF para. K Ordinary and other contributions and deposits 259,996, ,669,804 Employee contributions 93,675,279 89,922,814 Employer contributions 120,162, ,828,006 Withdrawal from employer contribution reserve for contribution funding -5,156,137-4,595,189 Single premiums and purchase sums 34,576,322 34,395,517 Employee special contributions 2,504 2,506 Employer special contributions 2,504 2,506 Deposits to pension capital of pensioners 6,884,370 77,306,349 Deposits to employer contribution reserves 9,478,450 7,444,408 Security fund subsidies 371, ,887 L Lump-sum benefits 312,614, ,266,103 Vested benefit deposits 293,390, ,474,258 Deposit upon takeover of portfolios of insured persons in 14,521,068 33,208,909 actuarial reserves 0 4,125,675 value fluctuation reserves 14,521,068 12,981,509 disposable assets 0 16,101,725 Deposits for advance withdrawals for home ownership/divorces 4,703,052 3,582,936 (K L) Inflow from contributions and lump-sum benefits 572,611, ,935,907 M Benefits under pension plan regulations -118,712, ,375,541 Retirement pensions -51,969,319-47,819,660 Survivors pensions -6,321,632-5,178,055 Disability pensions -8,470,478-8,418,755 Other benefits under pension plan regulations -6,070,152-3,547,241 Lump-sum benefits on retirement -37,953,139-43,477,321 Lump-sum benefits on death/disability -7,927,884-5,934,509 N Supplementary benefits -1,118,867-1,815,423 O Termination benefits -345,849, ,496,636 Vested benefits on departure -294,987, ,468,439 Transfer of additional funds on collective departure -40,094,622-15,837,737 Advance withdrawals for home ownership/divorces -10,768,113-10,190,460 (M O) Outflow for benefits and advance withdrawals -465,681, ,687,600 P/Q Formation of pension capital, actuarial reserves and contribution reserves -185,739, ,353,854 Formation of pension capital active members -83,984,353-59,497,130 Formation of pension capital pensioners -35,435, ,850, Formation of actuarial reserves -4,283,249-13,547, Dissolution/formation of surplus funds -4,657 13,921, Interest on savings capital -60,227,809-82,852,596 Formation of contribution reserves -1,803, , R Income from insurance benefits 10,908,033 14,675,612 Insurance benefits 10,908,033 14,675,612 S Insurance expenses -832, ,382 Insurance premiums -56,409 85,986 Security fund contributions -776, ,368 (K S) Net result of insurance activities -68,733, ,076, GEMINI Collective Foundation 2015 Annual Report

17 Income statement Investment result and other income Notes CHF CHF para. Income from cash and cash equivalents and money market investments ,888 Asset income of individual pools 50,030, ,780,513 Pool 0 885,171 1,472,685 Pool 20 28,238, ,977,820 Pool 35 2,345,399 17,156,094 Pool ,132 1,121,243 Pool individual strategies 18,543,247 48,044,861 Pool employer contribution reserves money market fund -112,066 7,810 Income from securities lending Interest income on other capital transfers -846, ,373 Asset management expenses -15,953,158-14,726, Interest on employer contribution reserves -412,124-3,801, T Net result from investment of assets 32,817, ,616, V Other income 11,860,528 9,265,894 Income from services rendered 6,090,887 5,739,390 Appropriated subsidies from employers and third parties 5,495,914 2,406,265 Other income 273,727 1,120,239 W Other expenses -172,364-2,043,545 X Administrative expenses -10,036,383-10,435,664 General administrative expenses -4,648,812-4,828,355 Marketing and advertising expenses -1,007, ,451 Brokerage activities -4,135,616-4,394,584 Auditor and occupational pensions expert -225, ,661 Regulatory authorities -19,100-18,613 (K X) Expenditure/income surplus prior to the formation of value fluctuation -34,263, ,327,298 reserves Y Formation of value fluctuation reserves of the employee benefits units -5,080,455-39,435, Z Dissolution/formation of disposable assets of the employee benefits units 41,246,628-94,066, Z Income/expenditure surplus for disposable assets of the Foundation 1,902,284-6,174, GEMINI Collective Foundation 2015 Annual Report 17

18 1 Principles and organisation 11 Legal form and purpose GEMINI Collective Foundation is a foundation governed by private law. It is intended for the employees of the affiliated companies and their dependants and survivors. The Foundation offers protection against the economic consequences of old age, death and disability. 12 BVG registration and security fund GEMINI Collective Foundation covers the BVG mandatory pension requirements and is registered in the Cantonal Register of Supervised Institutions of the Canton of Schwyz under the number SZ It pays the security fund the individual contributions of the affiliated employee benefits units after offsetting against the individually calculated subsidies 13 Foundation charter and regulations Document Created Valid from Foundation charter Voting regulations Framework regulations Investment regulations Reserve regulations Organisational regulations Regulations on partial or total liquidation Joint management body/signing authority Any two of the members of the Foundation Board, general management and other authorised signatories have joint signatory power. Foundation Board (Term of office ) Employer representatives Vital G. Stutz, Advozug (Chairman) Hans Roth, Independent Consultant Hans Waldmeier, BCO Vorsorge AG Employee representatives Anita Auf der Maur, Mercedes-Benz Automobil AG (Vice Chairwoman) Markus Burri, Arbenz + Partner AG Rolf Schneider, Independent Consultant 18 GEMINI Collective Foundation 2015 Annual Report

19 General management Christoph Oeschger, Managing Director Stefan Sadler, Deputy Managing Director Other authorised signatories of the administrative office Jacky Baula, Western Switzerland Client Management Nadine Devaux, Customer Advisor Fabian Hauenstein, Sales Advisor Elvira Hauser, Customer Advisor Helga Hentsch, Head of Customer Service Gottfried Herger, Quality Manager Markus Koch, Head of Sales André Lehmann, Head of Lausanne Office Ivana Reiss, Head of Investment Management Roger Rüfenacht, Head of Foundation Accounts Michael Sauter, Head of Benefits Service Andy Schmeltzer, Head of Customer Service Ursula Seliner, Quality Manager Sachin Sukthankar, Investment Controller Peter Vogt, Customer Advisor 15 Expert, auditor, consultant, supervisory authority Occupational benefits expert René Zehnder, Allvisa AG, Zurich Auditor Patrik Schaller, Ernst & Young AG, Basel Investment controlling UBS Fund Management (Switzerland) AG, Basel Consultant Complementa Investment-Controlling AG, St. Gallen Supervisory authority Zentralschweizer BVG- und Stiftungsaufsicht (ZBSA), Lucerne 16 Affiliated employee benefits units As at 31 December 2015, 331 employee benefits units of independent companies were affiliated, which represents a decrease of three employee benefits units in the year under review. However, the number of insured persons per employee benefits unit increased further from an average of 59 to 62. GEMINI Collective Foundation 2015 Annual Report 19

20 2 Employee benefits units, active members and pensioners Each affiliated company confirms to GEMINI Collective Foundation in the salary information as at 1 January that all persons to be insured have been duly registered with their effective annual AHV salaries and that all changes have been reported and the employees are paying no more than 50% of the contributions to the individual employee benefits unit. The completeness of the portfolio of insured members and the recording of contributions can accordingly be guaranteed. Portfolio of employee benefits units Portfolio Additions Departures Change Active employee benefits units Portfolio of active members and pensioners 1) Portfolio Additions Departures Change Active members 19,860 2,570 1,834 20, Retirement pensioners 2, , Disability pension recipients 2) Spouse s pensions Children s pensions Total 23,064 2,926 2,083 23, ) Of the total number of 3,311 pensioners, 2,904 are managed by the employee benefits unit Pensions and 407 directly by the individual employee benefits units. 2) This figure includes 17 (previous year 29) disability pension recipients for whom GEMINI is not currently required to pay benefits due to coordination with an accident insurance company. 20 GEMINI Collective Foundation 2015 Annual Report

21 3 Type of implementation of purpose 31 Note concerning pension plan The Collective Foundation operates mandatory and supplementary savings scheme for each employee benefits unit with supplementary risk insurance. One or more pension plans are defined for each employee benefits unit by the responsible pension fund committee. The benefits and their financing are freely definable within the scope of the BVG. The retirement and termination benefits comprise defined contribution plans and a universal conversion rate is applied to the entire savings capital. The risk benefits in the event of death and disability normally comprise defined benefit plans on the basis of the insured salary. Individual employee benefits units define the amount of the benefits according to the BVG regulations. The risk benefits as per the regulations are autonomously borne by GEMINI Collective Foundation. There is a reinsurance policy held with Zürich Lebensversicherungsgesellschaft AG, Zurich, to cover the peak risks in individual cases. 32 Financing, financing method GEMINI Collective Foundation is financed by contributions from employers and employees. The average share of employer companies is 56% and that of employees 44%. Financing is governed in such a way as to ensure that the Collective Foundation is able to meet its regulatory obligations at all times. 33 Further information about pension fund activities The pension fund committees of the affiliated employee benefits units can decide to provide discretionary benefits. The actuarial reserves for these are formed. Insured members and employers can purchase benefits for early retirement; these are paid to the beneficiaries via GEMINI Collective Foundation. GEMINI Collective Foundation 2015 Annual Report 21

22 4 Valuation and accounting principles, consistency 41 Confirmation of accounting in accordance with Swiss GAAP FER 26 The provisions of Swiss GAAP FER 26 were applied to the annual financial statements as at 31 December 2015 (main items with letters A Z). 42 Accounting and valuation principles The accounting and valuation principles correspond with the provisions of Art. 47, 48 and 48a c BVV 2 as well as Swiss GAAP FER 26. The current and actual values as at the reporting date are posted as follows: Currency conversion: exchange rate on reporting date Cash and cash equivalents, receivables, liabilities: nominal value Securities (including units of investment funds and investment foundations): market value Deferrals, pension capital and non-actuarial reserves: nominal value Actuarial reserves: calculation by occupational benefits expert Target value of value fluctuation reserves: financial economic approach 22 GEMINI Collective Foundation 2015 Annual Report

23 5 Actuarial risks/risk coverage/coverage ratio 51 Type of risk coverage, reinsurance GEMINI has autonomously borne the risks of disability and death since 1 January There is a reinsurance policy held with Zürich Lebensversicherungsgesellschaft AG, Zurich to cover the peak risks in individual cases (excess of loss). Current retirement pensions and survivors pensions resulting therefrom that were incurred before 1 January 2005 are reinsured with Swiss Life, Zurich. The redemption values of the pensions purchased from Swiss life insurance companies amount to CHF 109,909,652 (previous year CHF 97,051,236). Since 1 January 2005, GEMINI Collective Foundation has autonomously managed newly incurred retirement pensions in the employee benefits unit Pensions. The necessary actuarial reserves for the longevity and interest rate risk are calculated by the occupational benefits expert and managed separately in the employee benefits unit Pensions. The Board of Trustees has formed various reserves and conducted allocations on the basis of expert guidelines and recommendations (see para. 56). It also manages surplus funds. The surplus corresponds to the income surplus of the Foundation s income statement following the formation of actuarial reserves and reserves in accordance with the reserve regulations as well as the formation of value fluctuation reserves and disposable assets of the employee benefits units. Disposable assets of the Foundation (equalisation fund) CHF CHF Balance of equalisation fund on ,653,046 21,827,236 Allocation to employee benefits unit Pensions -51,743-6,178,423 Income/expenditure surplus of disposable assets of the Foundation 1,954,027 4,233 Total equalisation fund on ,555,330 15,653,046 GEMINI Collective Foundation 2015 Annual Report 23

24 52 Performance and interest on savings assets in defined contribution plan CHF CHF Balance of savings assets on ,362,842,945 2,218,965,701 Less termination of internal transfers at end of previous year on ,887,097-1,359,580 Employee savings contributions 77,216,569 73,679,814 Employer savings contributions 102,663,133 98,511,926 Other contributions and deposits 1) 34,962,520 34,806,562 Vested benefit deposits 176,543, ,892,991 Vested benefit deposits from new contracts 116,846, ,581,265 Repayments of advance withdrawals for home ownership/divorces 4,703,052 3,582,936 Vested benefits on departure 1) -227,881, ,206,578 Vested benefits on contract termination -65,377,669-63,261,858 Advance withdrawals for home ownership/divorces -10,768,114-10,190,459 Lump-sum benefit due to retirement, death 2) and disability -42,470,679-48,385,187 Termination due to retirement, death: transfer to employee benefits -80,995,102-85,580,445 unit Pensions of GEMINI Collective Foundation Termination due to retirement, death: transfer to Foundation -1,458, ,837 (autonomous) Internal transfers at year-end 3,486,232 2,887,097 Interest on savings capital 60,227,810 82,852,597 Total savings assets of active members on ,507,654,243 2,362,842,945 1) Includes CHF 14,774 (previous year CHF 48,157) for increase to BVG minimum benefits on departure and security fund subsidies of CHF 371,424 (previous year CHF 362,887) 2) The additional autonomously borne lump-sum death benefit of CHF 7,850,643 (previous year CHF 5,731,457) is not included here. The interest rate paid on the savings capital is determined following the disclosure of the net income generated by an employee benefits unit as at the end of October by the pension fund committees of the employee benefits units comprising equal numbers of employer and employee representatives. The statutory BVG minimum interest rate, Art. 46 BVV 2 on benefit increases for collective and communal institutions when value fluctuation reserves are not fully accrued and the guidelines on the formation of value fluctuation reserves are taken into account. The BVG minimum interest rate has also been applied to mid-year departures where no other resolution has been passed by the employee benefits unit. 24 GEMINI Collective Foundation 2015 Annual Report

25 53 Total BVG retirement assets The total BVG retirement assets of all insured members as at 31 December 2015 amounted to CHF 1,155,536,220 (previous year CHF 1,082,350,270). 54 Pension capital of pensioners The coverage capital of the autonomously managed pensions is recalculated annually by the occupational benefits expert on the basis of the prevailing portfolio of pensioners. As in the previous year, the BVG 2010 technical principles are applied (2010 generation table) and the actuarial interest rate was 2.5%. The pension capital of pensioners corresponds to the coverage capital calculated with the applicable principles and is comprised as follows: Pension capital of pensioners Coverage capital of employee benefits unit Pension: Retirement pensions 639,889, ,024,996 Retired person s children s benefits 2,032,118 1,672,105 Total coverage capital of retirement benefits 641,921, ,697,101 Spouse s pensions of insured members 15,083,331 11,924,916 Spouse s pensions of pensioners 19,719,102 19,441,486 Total coverage capital of spouse s pensions 34,802,433 31,366,402 Orphan s pensions of insured members 2,255,800 1,646,461 Orphan s pensions of pensioners 244, ,088 Total coverage capital of orphan s pensions 2,499,920 1,935,549 Coverage capital of disability pensions 66,288,183 75,619,376 Coverage capital of disabled person s children s benefits 3,637,906 4,281,355 Coverage capital of savings contribution exemptions 18,633,093 20,104,814 Total coverage capital of disability benefits 88,559, ,005,545 Total coverage capital of AHV bridging pensions 1,382,998 1,863,286 Total coverage capital of employee benefits unit Pensions 769,166, ,867,883 Coverage capital of the employee benefits units Retirement pensions 48,947,676 51,343,120 Retired person s children s benefits 0 0 Total coverage capital of retirement benefits 48,947,676 51,343,120 Spouse s pensions 8,961,975 8,545,768 Orphan s pensions of insured members 73,449 81,468 Total coverage capital of survivors benefits 9,035,424 8,627,236 Coverage capital of disability pensions 2,487,938 2,607,763 Coverage capital of disabled person s children s benefits 72,492 74,960 Coverage capital of savings contribution exemptions 221, ,107 Total coverage capital of disability benefits 2,782,381 2,940,830 Total AHV bridging pensions 1,157, ,842 Total coverage capital of individual employee benefits units 61,923,431 63,786,028 Total pension capital 831,089, ,653,912 GEMINI Collective Foundation 2015 Annual Report 25

26 Portfolio development of pensioners Number of pensioners managed in employee benefits unit Pensions Portfolio Additions Departures Change Retirement pensioners 1, , Spouse s pension recipients Disability pension recipients Children s/orphan s pensions Total 2, , Total pensions reinsured with insurance company Portfolio Additions Departures Change Retirement pensioners Spouse s pension recipients Disability pension recipients Children s/orphan s pensions Total Number of pensioners managed in individual employee benefits units Portfolio Additions Departures Change Retirement pensioners Spouse s pension recipients Disability pension recipients Children s/orphan s pensions Total Total pensioners 3, , The portfolio of retirement and spouse s pensions remains in a development phase that is reflected in the growth of coverage capital. The so-called group method is applied to the coverage capital of prospective spouse s pensions. The savings capital of the disability pension recipients continues to be managed by the employee benefits units in accordance with the applicable pension plan and is included in the pension capital of active members. Pensioners are managed at employee benefits unit level at several employee benefits units. Their coverage capital is reported separately but allocated to the pension capital of pensioners in the consolidated analysis. 26 GEMINI Collective Foundation 2015 Annual Report

27 55 Result of the last actuarial report An actuarial audit of the Collective Foundation was carried out at the end of 2015 in accordance with Art. 52e BVG. The result of the audit is as follows: The Collective Foundation is well placed financially (average of affiliated employee benefits units) and has good structural risk tolerance. All actuarial reserves are sufficient. Based on past experience, the contributions are sufficient to finance the average occupational benefits to be expected. With an average coverage ratio of all affiliated employee benefits units of % at Collective Foundation level (excluding employer contribution reserves without right of usage), the Collective Foundation was attested the security to meet its benefit obligations. Those employee benefits units with underfunding were permitted to remain underfunded for a limited period subject to the initiation or continuation of restructuring measures (Art. 65c BVG). The technical principles of BVG 2010 reflect updated empirical data on the life expectancy of pensioners. At 2.5% the actuarial interest rate is below the reference interest rate of 2.75% published by the Swiss Chamber of Pension Actuaries for the 2015 annual financial statements. GEMINI Collective Foundation 2015 Annual Report 27

28 56 Composition of actuarial reserves The actuarial reserves are formed in accordance with the regulations on the formation of reserves and provisions of 3 September The following breakdown is based on the envisaged regulatory structure. The reserves are composed as follows: Employee benefits unit Pensions CHF CHF Reserve for conversion rate 33,426,027 33,669,426 Reserve for fluctuations in risks of death and disability 31,857,621 32,185,713 Reserve for increase in life expectancy 19,194,581 14,600,092 Total employee benefits unit Pensions 84,478,229 80,455,231 Individual employee benefits units Reserve for fluctuations in risks of death and disability 2,646,539 2,646,539 Reserve for increase in life expectancy 1,519,137 1,258,224 Reserve for retirement losses 369, ,517 Reserve for protection of vested rights 156, ,300 Reserve for portfolio development 10,480 11,142 Total pensions managed in individual employee benefits units 4,701,973 4,441,722 Overall total 89,180,202 84,896, GEMINI Collective Foundation 2015 Annual Report

29 Reserves in employee benefits unit Pensions (at Foundation level) The reserve for the conversion rate came to CHF 33,426,027 as at the end of 2015 and is in line with the target. The reserve for fluctuations in the risks of disability and death comprises reinsurance within the meaning of Art. 43 BVV 2. It amounted to CHF 31,857,621 as at the end of 2015 and meets the target of 2.0% of the sum of insured risk salaries. The reserve for the increase in life expectancy that has been built up since 2010 by 0.5% of the pension capital of pensioners each year continued to develop in 2015 and now amounts to CHF 19,194,581. Reserves at employee benefits unit level The reserve for fluctuations in the risks of death and disability amounted to CHF 2,646,539 at the end of 2015 and is in line with the target for the pensions managed at employee benefits unit level. The reserve for the increase in life expectancy that is also maintained in the employee benefits units with their own portfolio of pensioners amounted to CHF 1,519,137 as at the end of Reserves are also maintained for retirement losses, the protection of vested rights and portfolio development. 57 Actuarial principles The BVG 2010 actuarial principles with the generation table for the base year 2010 continue to apply. The actuarial interest rate is 2.5% (previous year 2.5%). GEMINI Collective Foundation 2015 Annual Report 29

30 58 Coverage ratio in accordance with Art. 44 BVV 2 The value fluctuation reserves and disposable assets are managed separately for each affiliated employee benefits unit. The coverage ratio is therefore calculated individually for each affiliation. The overall sum of CHF 3,427,924,128 includes technical transfers amounting to CHF 3,486,232. Vested benefits and deposits for the following year in the amount of CHF 1,836,340 as well as pending payments amounting to CHF 1,235,658 have been eliminated and reported as liabilities. Coverage ratio in accordance with Art. 44 BVV 2 as at Coverage ratio including Savings/ Minimum required employer contribution reserves No. of employee Employee benefits units coverage capital value fluctuation without right of usage in % benefits units % CHF reserves CHF ,266,969 80,893, ,740,163 19,243, ,698,304 55,276, ,320,459 62,459, ,615,064 55,120,203 above ,283,169 56,908,539 Total ,427,924, ,901,904 Coverage ratio excluding Savings/ Minimum required employer contribution reserves No. of employee Employee benefits units coverage capital value fluctuation without right of usage in % benefits units % CHF reserves CHF under ,424 73, ,266,969 80,893, ,740,163 19,243, ,698,304 55,276, ,526,035 62,386, ,615,064 55,120,203 from ,283,169 56,908,539 Total ,427,924, ,901,904 The coverage ratio in the employee benefits unit Pensions in which the pensioners insured at Foundation level are managed changed to 99.64% as at 31 December 2015 (previous year %). 30 GEMINI Collective Foundation 2015 Annual Report

31 Underfunding/ Underfunding/ Reserve deficit Balance sheet Balance sheet Number of overfunding overfunding incl. underfunding total total Number of Number of members CHF % CHF CHF % active members disabled persons Total -3,149, ,042, ,117, ,114, ,326, ,854, , ,952 50,918, ,077, ,616, , ,041 77,507, ,420, ,828, , ,129 98,488, ,103, , , ,144, ,427, , , ,024, ,868,183 3,802,949, , ,076 Underfunding/ Underfunding/ Reserve deficit Balance sheet Balance sheet Number of overfunding overfunding incl. underfunding total total Number of Number of members CHF % CHF CHF % active members disabled persons Total -88, , , ,149, ,042, ,117, ,114, ,326, ,854, , ,952 50,918, ,077, ,616, , ,041 77,398, ,420, ,924, , ,128 98,488, ,103, , , ,144, ,427, , , ,827, ,030,706 3,802,751, , ,076 GEMINI Collective Foundation 2015 Annual Report 31

32 6 Notes on the investment of assets and the net result from the investment of assets 61 Organisation of investment activities, investment regulations Investment committee The investment committee elected by the Foundation Board monitors the asset managers in collaboration with the independent investment controller UBS Fund Management (Switzerland) AG, Basel. Complementa Investment-Controlling AG, St. Gallen, advises the investment committee in its capacity as consultant. The Foundation Board is continuously informed about the overall performance of asset investments, the achievement of objectives and investment-specific aspects. Members Bernhard Moser (Chairman), independent Armin Braun-Kalberer, independent Felix Kottmann, Kottmann Advisory AG Wilfred Stoecklin, independent Investment pools The assets of GEMINI Collective Foundation were invested in 2015 in accordance with the investment regulations in force since 1 January 2015 in the four investment strategies GEMINI 0, GEMINI 20, GEMINI 35 and GEMINI 50. Asset managers Asset management was carried out by means of account balances, special mandates, funds and investment foundations by the following independent banks/asset managers selected by the Foundation Board: Aargauische Kantonalbank (until ) Avadis Investment Foundation Bank SYZ & CO AG Basler Kantonalbank (until ) Berninvest Good Buildings (until ) BlackRock Investment Management Credit Suisse Ecoreal Investment Foundation Graubündner Kantonalbank (until ) Jupiter Fund Management plc Lombard Odier Luzerner Kantonalbank (until ) Partners Group AG Pensimo Management AG Pictet & Cie. PostFinance RWC Partners Ltd. State Street Global Advisors AG 32 GEMINI Collective Foundation 2015 Annual Report

33 Swiss Life Investment Foundation Swiss Prime Investment Foundation (since ) Tellco Investment Foundation UBS AG The operational funds were managed by the administrative office of GEMINI Collective Foundation. Custody Global custody is assumed by UBS AG, Zurich, which manages the individual client accounts and custody accounts. Disclosure of voting right behaviour The Ordinance Against Excessive Compensation in Listed Companies (VegüV) defines the exercise of voting rights of Swiss companies listed in Switzerland or abroad. The GEMINI Collective Foundation has been following the voting recommendation of Ethos for a number of years and has exercised its voting rights accordingly. The Foundation Board is basing the exercise of its voting rights on the long-term interest of the Foundation s members. As regards the individual votes, the Board may alter the recommendations made by Ethos if it holds a different opinion. Details regarding the voting behaviour are published every quarter on the website of the GEMINI Collective Foundation. 62 Utilisation of expansions with conclusive statement of compliance with security and risk diversification Art. 50 BVV 2 governs the security and risk diversification of the investments. It requires the asset investments to be carefully selected, administered and monitored. The Foundation Board has reviewed the investment strategy and since the start of 2010 has foregone the alternative investments category. The overall assets of the Foundation include a small share of alternative investments comprising investments that are due to mature in the next few years. They are partially remaining in the Foundation s portfolio until the end of their term. The same statement likewise applies to the 17 investment strategies separately managed per individual client as to the assets of GEMINI Collective Foundation. These investment strategies partially contain higher contingents of non-traditional investments than the GEMINI pools, thereby exerting an impact on the consolidated figures of the Foundation. UBS AG prepares a separate monthly report for these strategies and Complementa Investment-Controlling AG monitors compliance with the strategies. GEMINI Collective Foundation 2015 Annual Report 33

34 63 Target size and calculation of value fluctuation reserves The value fluctuation reserves are formed for each employee benefits unit from the revenue surplus. The amount of reserves required depends on the investment strategy selected by the pension fund committee of the affiliated employee benefits unit. The minimum required value fluctuation reserves and the target reserve are calculated with the help of the concept of PPCmetrics AG that has been commissioned by the Foundation Board to carry out this calculation. The minimum required value fluctuation reserves as a percentage of committed funds are set out in the investment regulations applicable as of 1 January Minimum required value fluctuation reserves Mandatory Supplementary % (executive and supplementary funds) % GEMINI Pool GEMINI Pool GEMINI Pool GEMINI Pool In accordance with the investment regulations, the employee benefits units are recommended to build up the following target value fluctuation reserves to enable them to withstand larger fluctuations in the investment of assets: Target value fluctuation reserves Mandatory Supplementary % (executive and supplementary funds) % GEMINI Pool GEMINI Pool GEMINI Pool GEMINI Pool GEMINI Collective Foundation 2015 Annual Report

35 64 Presentation of investment of assets by investment category per investment pool Investment category Strategy Fluctuation margins in % Market value Effective share 1) GEMINI Pool 0 (10 employee benefits units) % Min. Max. CHF % Liquidity 5.0 1,160, Bonds CHF ,606, of which foreign currency government bonds hedged (720,146.19) (2.13) of which inflation-hedged bonds (2,594,545.40) (7.67) Mortgages Switzerland ,014, Real estate Switzerland ,065, Total ,846, ) Including liquid assets on Managed Account (not included in the fact sheet) GEMINI Pool 20 (255 employee benefits units) Liquidity ,014, Bonds CHF ,035, Foreign currency bonds ,661, of which foreign currency government bonds hedged (21.0) (17.0) (23.0) (590,641,037) (20.72) of which foreign currency corporate bonds hedged (12.0) (8.0) (14.0) (335,020,742) (11.75) Convertible bonds ,255, Swiss equities ,298, Foreign equities ,429, Foreign equities hedged ,917, Emerging market equities ,814, Alternative investments ,464, Real estate Switzerland ,195, Total ,850,087, GEMINI Pool 35 (33 employee benefits units) Liquidity ,145, Bonds CHF ,391, Foreign currency bonds ,761, of which foreign currency government bonds hedged (15.0) (11.5) (17.0) (46,737,278) (14.95) of which foreign currency corporate bonds hedged (10.0) (6.5) (12.0) (31,024,575) (9.92) Convertible bonds ,490, Swiss equities ,569, Foreign equities ,634, Foreign equities hedged ,375, Emerging market equities ,912, Alternative investments ,181, Real estate Switzerland ,160, Total ,622, GEMINI Collective Foundation 2015 Annual Report 35

36 Investment category Strategy Fluctuation margins in % Market value Effective share GEMINI Pool 50 (5 employee benefits units) % Min. Max. CHF % Liquidity , Bonds CHF ,855, Foreign currency bonds ,746, of which foreign currency government bonds hedged (11.0) (7.5) (13.0) (1,591,442) (10.68) of which foreign currency corporate bonds hedged (8.0) (5.0) (10.0) (1,155,070) (7.76) Convertible bonds , Swiss equities ,839, Foreign equities , Foreign equities hedged ,439, Emerging market equities , Alternative investments , Real estate Switzerland ,204, Total ,894, Twenty-four employee benefits units with a total of 17 investment strategies individually define and monitor their investment strategies. Together they manage overall assets amounting to CHF 672,922,103 (previous year CHF 585,235,310). CHF 16,397,118 (previous year CHF 15,262,501) are invested in the employer contribution reserve investment category in the money market fund. The assets of four employee benefits units are invested in the contract termination custody account. The custody account amounts to CHF 790,902 (previous year CHF 22,754,088). Together with the four GEMINI investment pools, investment assets as at 31 December 2015 came to CHF 3,900,759,691 (previous year CHF 3,726,651,859). 36 GEMINI Collective Foundation 2015 Annual Report

37 BVV Report In/decrease CHF % CHF % CHF % Money market 268,298, ,498, ,199, Account CHF 92,660,995 23,389,403 69,271,591 Money market fund CHF 48,245,550 37,655,542 10,590,008 Short duration bond fund 105,081, ,081,840 MAC liquidity management 21,958, ,123, ,165,294 Foreign currency accounts 351,766 2,329,552-1,977,786 Currency hedges -197, , , Total bonds 1,929,329, ,775,512, ,817, Bonds CHF 850,538, ,699,180 62,839,696 Foreign currency bonds hedged 12,181,055 11,071,499 1,109,556 Foreign currency bonds 16,124,175 45,103,795-28,979,620 Foreign currency government bonds hedged 658,206, ,824,533 85,382,335 Foreign currency corporate bonds hedged 389,795, ,351,902 32,443,776 Emerging markets debt 2,483,331 1,461,409 1,021,922 Total convertible bonds 130,123, ,664, ,458, Foreign currency convertible bonds hedged 126,784, ,056,620 3,727,798 Foreign currency convertible bonds 3,339,243 3,608, ,059 Mortgages Switzerland 11,825, ,246, , Real estate 658,747, ,918, ,829, Real estate Switzerland listed 101,632,285 84,687,498 16,944,787 Real estate Switzerland unlisted 547,087, ,255,958 62,831,290 Foreign real estate listed 2,032,041 2,205, ,296 Foreign real estate unlisted 7,995,882 7,769, ,511 Total equities 844,835, ,159, ,323, Swiss equities 241,700, ,848,806-12,148,095 Foreign equities 271,730, ,661,996-9,931,992 Foreign equities hedged 268,703, ,023,721 19,679,691 Emerging market equities 62,701,709 67,624,492-4,922,783 Alternative investments 57,795, ,809, ,986, Foreign currency money market investments 1) 187, ,159 Senior loans hedged 904, , ,690 Commodities 1,015,100 2,845,352-1,830,252 Commodities hedged 777, ,212 Insurance-linked securities 603, ,115 58,044 Hedge funds 12,359,247 21,503,912-9,144,664 Private equity 41,949,157 29,153,333 12,795,824 Total 3,900,759, ,726,651, ,107, ) Only includes funds managed in connection with callable private equity in the money market Maximum BVV Limitation according to Art. 55 BVV 2 % % % Mortgage securities Equities Real estate Alternative investments Foreign currencies without currency hedging GEMINI Collective Foundation 2015 Annual Report 37

38 65 Pending capital commitments The pending capital commitments of the Foundation as well as an employee benefits unit with individual investment in assets amounted to CHF 3,094,816 at the end of 2015 (previous year CHF 5,517,785). 66 Securities lending Securities lending is generally permitted for improving the investment return and is carried out exclusively via the global custodian. As in the previous year and in accordance with a resolution of the Foundation Board, securities lending was not carried out in the 2015 financial year. 67 Note on the net result from the investment of assets Return on overall assets CHF CHF Sum of all assets at the start of the financial year 3,817,503,649 3,336,375,354 Sum of all assets at the end of the financial year 3,966,873,614 3,817,503,649 Average portfolio of assets (unweighted) 3,892,188,632 3,576,939,501 Net result from investment of assets prior to interest payment 32,817, ,616,929 on employer contribution reserves plus interest on employer contribution reserves 1) 412,124 3,801,688 Effective net result 33,229, ,418,617 Unweighted return generated on overall assets in % ) As GEMINI credits/debits the capital gains in CHF to the employer contribution reserves, they are included here following deduction in the income statement from the net result in accordance with Swiss GAAP FER 26. The capital gains are calculated individually for each employee benefits unit. The employee benefits units base the interest paid on the savings capital of their members on this. For the employer contribution reserve accounts the employer has the choice of investing these assets in the same way as the pension capital or placing them in a money market fund held with Bank Pictet & Cie that is currently earning interest at -0.1%. Return generated in % GEMINI Pool GEMINI Pool GEMINI Pool GEMINI Pool These figures refer to the time-weighted rates of return in the GEMINI pools. The capital gains of the respective employee benefits units are calculated individually according to their money-weighted rate of return. For the unpaid costs of the Foundation, 0.2% of the savings capital (CHF 4,611,299) was debited from the employee benefits units invested in GEMINI pools in favour of the equalisation fund in the year under review (previous year CHF 4,347,793). 38 GEMINI Collective Foundation 2015 Annual Report

39 The administrative office disposes of the cash accounts and money market investments according to the foreseeable cash flows. The existing bank accounts with UBS AG recorded a balance of CHF 37,666,346 as at 31 December 2015 (previous year CHF 31,518,321). 68 Note on the asset management costs Investments of assets Pools of the Foundation CHF CHF Pool 0 33,846,538 38,543,156 Pool 20 2,850,077,135 2,825,500,617 Pool ,622, ,929,264 Pool 50 14,894,492 14,181,011 Employer contribution reserves money market fund 16,397,118 15,262,501 Total transparent investments of assets 3,227,837,588 3,141,416,549 Non-transparent investments of assets in accordance with Art. 48a para. 3 BVV 2 Total investments of assets of pools of the Foundation 3,227,837,588 3,141,416,549 Share of transparent investments (cost transparency ratio) 100% 100% Clients with individual investments of assets Total transparent investments of assets 661,003, ,131,277 Non-transparent investments of assets in accordance with Art. 48a para. 3 BVV 2 11,918,420 10,104,033 Total investments of assets of clients with individual investments of assets 672,922, ,235,310 Share of transparent investments (cost transparency ratio) 98.23% 98.27% Overall total investments of assets 3,900,759,691 3,726,651,859 Share of transparent investments (cost transparency ratio) 99.69% 99.73% Directly recognised asset management costs Investment committee fee 108, ,910 Complementa Investment-Controlling (consultant) 88,322 93,261 General asset consulting and management 180,649 36,511 Bank fees 32,009 14,783 Total directly recognised asset management costs 409, ,465 Sum of all key cost figures for collective investments 15,543,282 14,472,946 TER Pool % 0.50% TER Pool % 0.35% TER Pool % 0.35% TER Pool % 0.37% TER employer contribution reserves money market fund 0.07% 0.02% Average TER of all pools directly managed by GEMINI 0.34% 0.35% Average TER of all clients with individual investments of assets 1.19% 1.09% Total asset management costs recognised in the income statement 15,953,158 14,726,411 Total asset management costs as % of transparent investments of assets 0.41% 0.40% GEMINI Collective Foundation 2015 Annual Report 39

40 List of non-transparent investments as at the balance sheet date ISIN Provider Product name No. of units Market value per unit in CHF Total market value in CHF as % of pension assets BMG PG3 Trd Fin Fd PG3 TRD USD PNV-A ,017, DE000A1EV899 Commerzbank BASKET/DRES 30 ZT ,435, GG00B57GCT81 Part Gr Abs Ret PART GR AB CHF-I-AC ,741, LU Partn Gr GI PARTN GR GI ID ,724, VGG3299L1004 FAIRFIELD Sentry FAIRFIELD SENTRY (HF) VGG4411P2769 Hermes World USD HERMES WORLD USD Total non-transparent investments 11,918, These products include two cases of products from bankruptcies for which a bankruptcy dividend can potentially be expected. The other products comprise more recent investments for which no revised TER was available as at the balance sheet date. 69 Note on investments in the employer and employer contribution reserves The receivables from employers comprise short-term current account balances (accounts receivable accounts) totalling CHF 16,168,687 that are balanced in the first quarter of the following year. The limit of 20% of the total assets of the employee benefits unit is not exceeded in each case. The employer companies make monthly contribution payments to prevent larger outstanding amounts. The employer contribution reserves amount to a total of CHF 75,850,145 and are divided into those with right of usage (CHF 75,652,588) and those without right of usage (CHF 197,557). According to the policy of GEMINI Collective Foundation, no investments are made in affiliated companies apart from the aforementioned current account balances CHF CHF Employer contribution reserves on ,634,405 69,305,033 Allocation 1) 9,875,538 8,462,983 Usage 1) -8,071,922-7,935,299 Interest 412,124 3,801,688 Total employer contribution reserves on ) 75,850,145 73,634,405 1) Also includes various internal transfers of capital as well as transfers to the value fluctuation reserve 2) Thereof employer contribution reserves without right of usage of CHF 197,557 (2015) and CHF 385,110 (2014); see para GEMINI Collective Foundation 2015 Annual Report

41 7 Note on further items in the balance sheet and income statement 71 Receivables CHF CHF Premium balance with Swiss Life 203,593 5,613,692 Receivable of a new affiliation from its former employee benefits 11,134,921 12,485,157 institution Reclaim of pension benefits 29,803 6,607 Accounts payable (short-term liabilities) 1, Total 11,166,016 12,492, Prepaid expenses All prepaid expenses were liquidated again as of 1 January The following items resulted in accruals: CHF CHF Contributions and benefits that cannot be settled until the 103, ,167 following year Expenses for the following year and income in the following year 0 1,145 for the closing year already booked at Foundation level Total 103, ,312 GEMINI Collective Foundation 2015 Annual Report 41

42 73 Liabilities CHF CHF Pending payments of termination benefits 56,487,737 62,423,520 Pending payments of death benefits 2,198,796 0 Current account balances of affiliated employers held at the 2,105,383 2,245,630 Foundation Vested benefits and deposits in previous year that cannot be 1,836,340 2,857,067 booked to savings capital until following year Disposable assets, returns of termination benefits that cannot 1,235, ,288 be paid out until the following year Not yet definitively allocatable vested benefits 894,268 19,327 (clarification account) Liability from investment pool agreement 854, ,282 Assets transferred from new contracts as at 1.1. of the 713,897 16,024 following year Payments returned to the Foundation that could not yet be 436, ,366 forwarded by the reporting date Balance of BVG security fund 404, ,481 Liabilities arising from partial liquidations 316, ,417 Pending payments of lump-sum benefits on retirement or death 245,730 49,662 Tax at source 68,564 15,249 Total 67,798,928 70,587, Deferred income All deferred income was liquidated again as of 1 January The following items resulted in deferrals: Foundation level: insurance benefits of the first quarter of the following year already received CHF CHF 2,221,600 2,342,292 Foundation level: various short-term liabilities 387, ,604 Employee benefits unit level: occupational benefits not yet settled 173,290 55,864 Securities transactions from securities accounting booked at Foundation level 130, ,708 Total 2,912,994 3,241, GEMINI Collective Foundation 2015 Annual Report

43 8 Requirements of the supervisory authority Retrocessions The asset managers undertake in the agreements with GEMINI Collective Foundation to report of their own accord all retrocessions received for the past year no later than by the end of February of the new year and to remunerate GEMINI Collective Foundation accordingly. The check carried out among all asset managers (including clients with individual investment strategies) has revealed that retrocessions totalling CHF 8,693 were directly credited to the individual investment categories within GEMINI Collective Foundation in the form of cost discounts in GEMINI Collective Foundation 2015 Annual Report 43

44 9 Further information concerning the financial situation 91 Underfunding/note concerning measures taken (Art. 44 BVV 2) As at 31 December 2015 and taking into account the employer contribution reserves without right of usage, nine out of 331 employee benefits units reported underfunding. 92 Employer waiver of right of usage to employer contribution reserves The entire employer contribution reserves without right of usage amount to CHF 197,557. These enable employers with employee benefits units sustaining underfundings to increase the coverage ratio of their employee benefits units accordingly (see paragraph 58). 93 Partial liquidations/contract terminations Pension capital totalling CHF 65,377,668 was transferred at the start of 2015 due to contract terminations in The sum of value fluctuation reserves and disposable assets, employer contribution reserves and coverage capital for disability cases to be transferred amounted to CHF 41,684, Fees of the Foundation Board and investment committee CHF CHF Foundation Board 222, ,239 Investment committee 108, , Ongoing legal proceedings One member has filed a suit against the Foundation s overinsurance calculation. This case is currently pending at the Federal Supreme Court. It only entails minor costs for the Foundation. One employee benefits unit has contested the partial liquidation of the former employee benefits institution together with the employer. The case is still pending and does not entail any costs for the Foundation. 10 Events after the balance sheet date None 44 GEMINI Collective Foundation 2015 Annual Report

45 Auditors report GEMINI Collective Foundation 2015 Annual Report 45