Financial situation
The first three quarters of 2017 were characterised by static to moderately increasing Swiss interest rates and pleasingly rising stock and real estate markets. Up to now, this trend has continued in the fourth quarter.

Even if the portfolio strategy is orientated towards lower share and currency risks compared with the Swiss average, up to the middle of December, it proved possible to achieve a positive overall rate of return of 3.3%. The actuarial coverage ratio before interest on retirement assets amounts to 103.4% in 2017.

Interest in 2017 and interest rate during the course of 2018
The market-consistent valuation of pension capital and low investment risks are again having a positive effect on the interest on the retirement assets of those currently insured. This initial situation enables the Board of Trustees to pay an interest rate of 2% on retirement assets. In this respect, the interest on retirement assets is, as targeted, higher than that of the pension capital of 1.25%. However, it also lies significantly higher than the minimum interest rate of 1% of the OPA (Occupational Pensions Act). At the same time, it will be possible to increase the legally prescribed reserve for fluctuations in value on the financial markets.

The interest rate is 0.5% for such events as withdrawals and retirements during the course of 2018.

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Our offices will be closed from 23 December 2017 up to and including 2 January 2018.

We wish you a joyous festive season.

Financial situation
The financial markets developed satisfactorily, in spite of incidences of political turbulence. The portfolio strategy which was simplified with effect from 1 January 2017 has proved itself. All investment categories have closed with positive rates of return. It was possible to earn a rate of return of 2.72% by the end of August. The actuarial coverage ratio has climbed from 101.1% to 103.2% since the beginning of the year, but is still below the target of 117%. The economic coverage ratio also increased from 84.6% to 86.5%. It is the most important management performance indicator and best illustrates the actual financial situation of the pension fund.

No pension increase in 2018
By virtue of the current actuarial coverage ratio of 103.2% and limited risk-carrying capacity, the requirements warranting inflation adjustment as at 1 January 2018 for current pensions have not been fulfilled.

2016 financial statements and annual report
The Foundation Board has approved the 2016 financial statements and annual report. In spite of a return on investment of 3.81% the coverage ratio dropped from 102.9% in the previous year to 101.1% as of 31 December 2016. The main reason for this is a further reduction in the valuation interest rate for the pension obligations from 1.50% to 1.25% as a result of the persistently low interest rates. With the exception of Swiss shares, all other investment categories yielded a positive return on investment. Vorsorge RUAG's return on investment of 3.81% is average for the Swiss market.

In the 2016 annual report, the changes in regulations are explained once again. For instance, the conversation rate was lowered and savings contributions were increased as of 1 January 2017. In addition, the contributions for the risks associated with invalidity and death are now jointly financed by the employee and the employer. The bridging pension in case of early retirement, which had until now been financed by the employer, has been done away with.

These and other interesting contexts and details are available in the 2016 annual report (in German) which is published on our website effective immediately. Those insured persons who requested a printed version will receive it in the post in the coming days.

Financial situation
The coverage ratio has increased since the beginning of the year to 102.5% as of 31 March 2017. The return on investment for the first quarter of 2017 is approximately 1.6%. All investment categories except for foreign currency bonds have contributed to this positive result.

Constitution of the Foundation Board

The newly elected Foundation Board for the 2017 – 2020 period of office came together for a constitutive meeting. The Foundation Board constitutes itself and elected for the entire period of office Urs Kiener, CFO RUAG, as Chairman and Eric Wiesmann, Manager Sales Mechanisms, RUAG Space, as Vice-Chairman.

The other Members of the Foundation Board are:

Employers' representatives: Dr. Christian Ferber, Benoît Macherel, Peter Scherrer

Employees' representatives: Sabina Bieri, Hugo Gerber, Peter Probst