ZURICH / LAUSANNE / GENEVA, January 13, 2026 — Swiss Pension funds further improved their funding positions in Q4 2025, underlining their resilience despite ongoing market volatility and geopolitical uncertainty. Assets rose by 1.3% on the back of moderate returns while liabilities declined by 1.9%, supported by higher discount rates.
WTW’s Pension Index advanced by 4.1% in Q4 2025, lifting the funded ratio to 128.5 % - its highest level in two and a half years. The improvement reflects both favourable asset performance and declining obligations. Over the quarter, discount rates rose by 16 basis points, closing the year at around 1.2%, broadly in line with levels seen in Q1 2025.
Throughout the year, rates rose sharply early on, fluctuated mid-year, and moved higher again towards year-end. The latest increase reflects rising Swiss and European corporate bond yields, heightened political uncertainty, and expectations of prolonged elevated interest rates. Higher yields directly translated into higher discount rates for pension valuations. Meanwhile, asset values increased modestly, as the anticipated equity market correction has yet to materialize.
Solid performance in 2025 following an exceptional 2024
Following the exceptionally strong performance in 2024, during which Swiss pension funds achieved a benchmark return of around 10.1% p.a. and were able to rebuild their fluctuation reserves, 2025 proved less outstanding but nevertheless solid. With a benchmark return of approximately 3.2%, pension funds continued to generate positive results despite a more challenging and volatile market environment.
“The main driver behind the strong overall improvement in corporate pension balance sheets over the past three years has been the very strong asset returns over the period,” notes Adam Casey, Head of Corporate Retirement Consulting at WTW Switzerland. He adds: “The Swiss Pictet Asset Management pension return index has delivered cumulative returns in the region of an impressive 22% over the past three years. Nevertheless, given the currently elevated valuations in global equity markets a market correction could potentially be around the corner, so continued discipline and prudent risk management is required.”
Central banks hold steady as geopolitical uncertainty intensifies
During Q4 2025, the Swiss National Bank kept its policy rate unchanged at 0%, while the European Central Bank also left interest rates on hold, following earlier rate cuts in the easing cycle. In contrast, the U.S. Federal Reserve continued to normalize monetary policy, implementing a 0.25 percentage point rate cut in December. At the same time, persistent geopolitical tensions and elevated political uncertainty reinforced the message to institutional investors that geopolitics can no longer be treated as a peripheral risk. Shifts in the geopolitical landscape are increasingly challenging long-standing economic assumptions — from interest rate expectations to global trade dynamics — and are directly affecting the operating environment and business models of multinational companies that dominate many institutional portfolios.
Investors advised to adapt to the new normal of global uncertainty
Looking ahead to 2026, pension funds are advised to pursue a balanced and forward-looking investment strategy, focused on diversification and risk-controlled investment strategy, including preserving solid financial position.
“Pension funds should continuously monitor their portfolios as market, interest rate, and geopolitical conditions evolve,” recommends Alexandra Tischendorf, Head of Investment at WTW Switzerland. “An ‘active approach’ can help address risks early and capture opportunities without deviating from target values.”
She adds: “We are also seeing increased adoption of cash flow–driven investment (CDI) approaches, particularly for liabilities with fixed payment profiles. These strategies align investment returns more closely with expected cash flows and can enhance portfolio resilience compared to traditional duration-based approaches.”
WTW Pension Index - Switzerland
Background information on the study
Swiss Pension Finance Watch reviews quarterly how capital market performance affects pension plan financing in Switzerland. The study is part of the Global Pension Finance Watch from WTW which includes results back to 2000 for major retirement markets worldwide. The results are published quarterly with a focus on linked asset/liability results. It covers pension plans in Brazil, Canada, the Euro-zone, Japan, Switzerland, the U.K., and the U.S.
The impact of capital markets on these pension plans is two-fold:
- Investment performance on fund assets
- Changes in economic assumptions on plan liabilities (as measured by international accounting standards)
WTW’s model defines a benchmark pension plan that is intended to be representative of the pension liabilities and plan assets (including asset mix) that are typically found in each global market. The impact of movements in capital markets on assets and liabilities is combined to produce a Pension Index which reflects the movement in the funding level of the benchmark pension plan.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk, and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce, and maximize performance.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success - and provide perspective that moves you.
In Switzerland WTW is based with offices in Zurich, Geneva, and Lausanne.
