As pension funds lose on stock markets, how safe are retirements?

Reuters

Stock markets this year have been heading steadily downhill. With Swiss pension funds feeling the impact, future retirement payments are only barely guaranteed.

The world of financial markets is a fast-changing one. In January this year, pension funds had future payouts fully covered through their large reserves; since then, the so-called coverage ratio has fallen from 120% to 105% of future obligations. The reason for this is the downward trend on stock markets over the past months, across all important asset classes.

The situation could get even more serious if the trend continues: if the coverage ratio was to drop below 100% for a considerable time, current employers and employees could be forced to contribute more to boost the health of the overall pension pot.

Why are shares and bonds losing so much value at the moment? What’s the role of inflation and rising interest rates? And how safe are pensions? Find out in the latest Geldcast episode.

From stock exchanges and bitcoin to inflation and monetary policy – the Geldcast update features the latest from the world of international finance. Clear and entertaining for everyone who wants to stay up to date, the podcast is hosted by monetary economist and business journalist Fabio CanetgExternal link.

The SWI swissinfo.ch Geldcast

Author Fabio Canetg completed his doctorate in monetary policy at the University of Bern and the Toulouse School of Economics. Today he is a lecturer at the University of Bern. As a journalist, he works for SRF Arena, Republik Magazin and SWI swissinfo.ch, where he hosts the monetary policy podcast “Geldcast”.