Annual Report Summary report. Galenica Pension Fund a pension foundation of Galenica and of Vifor Pharma

Transcription

1 Annual Report 2016 Summary report Galenica Pension Fund a pension foundation of Galenica and of Vifor Pharma

2 Key figures Total assets CHF million +8.6 % compared with 2015 Coverage ratio per cent 1.4 % compared with 2015 Investment performance 3.41 per cent Up 0.32 % on 2015 Per-capita administration expense 165 CHF Down CHF 25 from 2015 Active participants and pension recipients Pension recipients Active participants Total 2,518 3,220 Total 702 Total Active participants 2,518 Pension recipients 702 Retirement pensions 472 Partner s pensions 135 Disability pensions 75 Child s pensions :1 Ratio of active participants to pension recipients 71 Average age of pension recipients excluding child recipients 1,180 women +99 compared with Average age of active participants 1,338 men +97 compared with Galenica Pension Fund Summary report 2016

3 Editorial Henri Michel Wieland Chairman of the Board of Trustees The Galenica Pension Fund posted a good financial result for the financial year The performance of the financial markets was marked by the Brexit referendum, the election of Donald Trump as President of the United States, the economy in China and low/negative interest rates. In this challenging and difficult investment environment the Galenica Pension Fund achieved net investment income of CHF 28 million, equivalent to a return of 3.4 %. Along with employer and employee contributions, the income generated forms a major component of the financing of benefits, so the performance of financial markets is very important. The current low level of interest rates and the introduction of negative rates for pension funds are a major burden. As a result of the reduction in the technical interest rate to 2.5 % (previous year: 3 %), the coverage ratio fell by 1.4 % points to % at 31 December At its meeting on 7 December 2016 the Board of Trustees decided that the pension capital of active insured members will have an interest rate of 2 % applied for the financial year This is 0.75 % higher than the 1.25 % statutory (BVG) minimum rate set by the Federal Council. Rising life expectancy means pensions are having to be paid for longer. Equally, the financial situation of pension funds will not change materially. The longterm financing of current and future pensions is therefore becoming increasingly complex, which poses a major challenge for the Board of Trustees and management. With the project Retirement Benefit 2020 the Federal Council is aiming to adapt to the changed framework conditions. This focuses on the same retirement age for men and women and the recalculation of the BVG conversion rates so as to make it possible to retain the current level of benefits. I would like to thank the members of the Board of Trustees as well as the office manager and his team for their great personal commitment to the success of the Galenica Pension Fund. There are still several more projects to be dealt with in the near future that will be a major challenge for all concerned. The prime objective is to place the benefits of the Galenica Pension Fund on a sustainable footing. Bern, March 2017 Henri Michel Wieland Chairman of the Board of Trustees Galenica Pension Fund Summary report

4 Managing bodies Board of Trustees The Board of Trustees is the highest decision-making body of a pension fund. It manages the pension fund in line with the statutory objectives. It issues the Pension Fund Regulations and represents the Fund externally. Board of Trustees (mandate to 2017) Neutral Chairman Henri Michel Wieland, Liebefeld Employer Representatives Felix Burkhard, Subingen Jörg Kneubühler, Bern Alexandros Sigalas, Nürensdorf Julien Vignot, Avry Employee Representatives Ulrich Christen, Lyss Katharina Heim, Arbon Sylvia Siegrist Iuncker, Bernex Brigitte Wüthrich, Bern Employee Benefit Committee The Employee Benefit Committee is responsible for the following tasks among others: Preparing the activities of the Board of Trustees Carrying out the Board of Trustees decisions Realising the asset structure and monitoring investment activities Monitoring the activities of management Neutral Chairman Henri Michel Wieland, Liebefeld Employer Representatives Felix Burkhard, Subingen Jörg Kneubühler, Bern Employee Representatives Katharina Heim, Arbon Sylvia Siegrist Iuncker, Bernex Managers René Mischler, Hinterkappelen Regula Schlachter, Bern Pension Fund Expert/Auditor/Regulatory Authority Pension Fund Expert Sonja Vonlanthen Vonlanthen Consulting SA, Carrouge Auditor T+R AG, Gümligen Regulatory Authority Bernische BVG- und Stiftungsaufsicht (BBSA, Bern BVG and foundation supervisory authority), Bern 4 Galenica Pension Fund Summary report 2016

5 Galenica Pension Fund Summary report

6 Financial statements Balance sheet Assets in CHF Cash and receivables 40,662, ,951, Bonds 169,516, ,079, Mortgage loans 3,977, ,013, Equities 338,298, ,562, Alternative investments 43,202, ,678, Real estate 194,319, ,036, Investments with employer 35,577, ,746, Total asset investments 825,554, ,069, Prepaid expenses and accrued income 808, , Total Assets 826,363, ,991, Liabilities in CHF Liabilities 4,387, ,391, Accrued expenses and prepaid income 214, , Employer contribution reserve 355, , Total pension capital and technical provisions 692,713, ,197, Fluctuation reserve 128,691, ,627, Total Liabilities 826,363, ,991, Galenica Pension Fund Summary report 2016

7 Operating statement in CHF Inflow from contributions and entry benefits 72,529, ,177, Outflow for benefits and early withdrawals 33,987, ,282, Creation of pension capital/provisions 63,295, ,536, Insurance income , Insurance expense 145, , Net result from insurance activities 24,899, ,780, Net result from asset investments 28,455, ,157, Other income and expenses 38, , Administration expense 530, , Surplus income prior to creation of fluctuation reserve 3,063, ,430, Creation of fluctuation reserve 3,063, ,430, Surplus income after creation of fluctuation reserve The report of the auditor and the recognised occupational fund expert are available on our website at Galenica Pension Fund Summary report

8 Development of interest rates and the coverage ratio Interest payments on the pension capital in % The Board of Trustees applies the interest rate approved by the Board of Trustees at the end of the year to the entire pension capital (both mandatory and extra-mandatory). During the year under review pension capital earned an interest rate 0.75 % higher than the statutory (BVG) rate of 1.25 % Effective interest rate BVG interest rate Effective average 2.1 % BVG average 2.0 % Development of the coverage ratio in % The coverage ratio shows the ratio of the assets held by the Fund to the pension capital (including technical provisions) required to fund the benefits payable to active participants and pension recipients. A figure of 100 % therefore means that the liabilities are covered in full % The average difference between the interest rate applied by the Pension Fund and the statutory minimum since the beginning of the BVG. 8 Galenica Pension Fund Summary report 2016

9 Development of investment performance/investment structure Development of investment performance in % The performance of 3.41 % is 0.25 % below the benchmark of 3.66 % Return in % Benchmark Average return 2.98 % Investment structure Short-term and liquid assets Bonds CHF Mortgages Foreign currency bonds Investment with employer Swiss equities Foreign equities Real estate Altemative investments in % The asset class mortgages fell short of the ranges defined in the Regulations. The total investment in foreign currencies without currency hedging exceeded the limit defined in the Regulations. Strategy Effective Galenica Pension Fund Summary report

10 10 Galenica Pension Fund Summary report 2016

11 Survey on benefits, information and communication We would like to thank the 569 insured members who took part in our survey in the year under review. This figure represents 25% of the insured members. The questions were answered as follows: Rating the benefits of our Pension Fund 96 % of insured members rated the benefits as good or very good. The high number of insured members who were unable to answer this question (18 %) indicates that is difficult give an opinion, especially because of the lack of ability to make a comparison. One of the things we will do in future to offer this ability is to publish the main results of the Swisscanto survey. This includes, for example, data on coverage ratios, returns, interest rates paid on retirement capital and administration costs. very good 25.6 % good 70.1 % satisfactory 3.9 % unsatisfactory 0.4 % Most important sources of information The insurance certificate and associated explanation are the most important sources of information for insured members. The new summary of the Annual Report is already very popular. Insurance certificate 27.2 % Notes on insurance certificate 16.7 % Annual report (summary version) 12.0 % Annual report (full version) 4.6 % Regulations 10.7 % Article in SPOT 4.2 % Quotes for an early withdrawal 5.0 % Website 8.2 % Retirement preparation courses 7.7 % Visits to Group locations 3.7 % Galenica Pension Fund Summary report

12 Quality of information material available 94 % of insured members who expressed a view rated the quality as good or very good. As a result of the comments received we will: Issue a glossary explaining the most important terms in occupational pensions (to be published on our website Introduce the ability to run simulations so insured members can do calculations themselves on the internet for things like early retirement, buy-ins or early withdrawals to purchase residential property. Consider issuing an information brochure summarising all the major issues concerning retirement savings and our benefits. very good 19.9 % good 74.1 % satisfactory 5.3 % unsatisfactory 0.8 % Pension Fund employees response to queries Warmest thanks to the 97 % of insured members who rated our responses as good or very good. We will do everything we can to keep this up. More than 99 % were also satisfied with our response times. very good 54.5 % good 42.6 % satisfactory 2.5 % unsatisfactory 0.4 % 12 Galenica Pension Fund Summary report 2016

13 What are the occupational pension issues people are interested in? The most important issue for insured members is old age. This ranks even ahead of the traditional issues of invalidity and death; then come early withdrawal to purchase residential property and buy-ins. Age 33.2 % Disability 11.5 % Death 13.1 % Early withdrawal 17.6 % Buy-ins 15.1 % Divorce 4.3 % Becoming self-employed 3.1 % Other 2.1 % 569 insured members took part in our survey. Around 96 % of those questioned rated the benefits of the Pension Fund as good or very good. Galenica Pension Fund Summary report

14 14 Galenica Pension Fund Summary report 2016

15 We are here to help you! We are more than happy to provide you with information on your pension. Take advantage of the different information options or contact us for personal advice. Written information When you join: Fund Regulations, insurance certificate including brief outline of benefits During your employment: Insurance certificate at least once a year, summary version of the annual report (full version on request), information on the use of retirement assets to finance home ownership, articles in the Pension Fund magazine SPOT When you leave: Transfer of vested benefits, information for insured members leaving the scheme, leaving statement Electronic information Fund website: Detailed information on the pension fund is available at Information seminars and events We offer our insured members courses to prepare for retirement. Course dates and detailed information are available on our website or in the intranet. We regularly visit the Group s offices to provide information on topical issues and/or to give you the opportunity to talk to us individually. Do you have any questions on your individual situation as regards your occupational retirement provision? We would be happy to advise you and look forward to talking to you personally. Phone or info@galenica-pvs.ch The Galenica Pension Fund team: from left to right: Eveline Lerch, Corinne Pasinato, Sandra Blaser, Regula Schlachter, René Mischler Galenica Pension Fund Summary report

16 Treat yourself to a holiday at the Galenica chalet in Schwarzsee! The chalet containing two separate apartments can be let by the week or, by arrangement, by the day. From CHF 350 per week From CHF 70 per day For further information and bookings: Tel or info@galenica-pvs.ch (Photos at Galenica Pension Fund Untermattweg 8 P.O. Box CH 3001 Bern Phone Fax info@galenica-pvs.ch