Private Markets · Pensions & Insurance · Asset Allocation

Swiss Pension Funds and the Endowment Model

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Swiss pension funds are moving toward a more endowment-like investment profile – more equities, more real assets, more illiquidity. Three independent 2026 studies show how far that shift has gone, and how much second-pillar governance still stands in the way of a genuine endowment model.

Swiss Pension Funds and the Endowment Model

At a glance

  • Equities reached 34.1–34.5% of Swiss pension fund portfolios in 2025 — a second consecutive record and the largest single asset class ahead of bonds.
  • Bonds fell to a historic low of 27.3–29.3%, roughly half their share three decades ago.
  • PPCmetrics reports the highest average crediting rate on record — 4.43% — more than three times the 1.25% statutory minimum, with funding ratios still above 118–121%.
  • Yet Swiss funds remain well short of a true endowment model: liability-driven governance and funding-ratio discipline set limits US endowments don't face, and nearly one in five funds exceeded a statutory asset-category limit in 2025.

What the data shows

Three studies published within months of each other in 2026 tell largely the same story from different angles.

  • PPCmetrics' Pensionskassen-Jahrbuch 2026 (350 funds, CHF 1,044 billion in assets, 4.5 million insured members): the average interest credited to active members' savings reached 4.43% in 2025 (median 4.00%) — the highest since PPCmetrics began tracking the figure in 2008 — with ~94% of funds crediting above the BVG statutory minimum of 1.25%. Over eleven years, cumulative crediting of 32.35% (2.58% p.a.) outpaced the statutory minimum's 13.23% (1.14% p.a.) by +19.12 percentage points. On allocation, PPCmetrics' own categorisation shows the same drift: Swiss-franc bonds fell to 23.5% in 2025 from 31.4% in 2015 (-7.9 points), real estate rose to 24.4% (+5.0 points), and combined alternatives/infrastructure roughly doubled to 6.2% (from 2.7%). The average absolute return across all 350 funds was +5.90%, and every fund in the sample finished 2025 positive.
  • Complementa's Risiko Check-up 2026, published in September 2026 and covering 32 years of data, found that equities reached 34.1% of average portfolios in 2025 — the largest single asset class for the second year running — while bonds fell to a historic low of 29.3%. Real estate held steady at roughly 22.6%, and alternative investments stood at 9.8% of total assets. Illiquid holdings across the system reached 35.7%, up from 28.2% fifteen years ago. Within alternatives, infrastructure (2.8% of total assets) has overtaken private equity (2.4%) as the largest category. The capital-weighted funding ratio climbed to 114.4% by the end of 2025, with only around 2% of funds underfunded.

  • Swisscanto's Pensionskassenstudie 2026, covering 528 pension funds and CHF 939 billion in assets, arrives at a closely aligned picture: equities at 34.5%, a new record, against bonds at 27.3% — a decade ago, bonds were still the largest asset class. Average net returns came to 6% in 2025, driven largely by equities; high bond allocations did not help performance. The dispersion is notable: funds in the top return decile held only 18% in bonds, versus more than double that among the weakest performers, whose net returns of 3.2% trailed the top decile's 9.1% by nearly six percentage points.

  • PPCmetrics' Pensionskassen-Jahrbuch 2026, covering 350 pension funds with CHF 1,044 billion in assets and 4.5 million insured members, corroborates the picture from a different angle. The average interest credited to active members' retirement savings reached 4.43% in 2025 (median 4.00%) — the highest since PPCmetrics began tracking the figure in 2008 — with roughly 94% of funds crediting above the BVG statutory minimum of 1.25%. Over the past eleven years, funds credited a cumulative 32.35% (2.58% p.a.), against 13.23% (1.14% p.a.) had they paid only the statutory minimum — a gap of +19.12 percentage points. On asset allocation, PPCmetrics' own categorisation shows the same drift away from bonds: Swiss-franc bonds fell to 23.5% of assets in 2025 from 31.4% in 2015 (-7.9 points), real estate rose to 24.4% (+5.0 points), and combined alternative investments and infrastructure roughly doubled to 6.2% (from 2.7% in 2015). The average absolute return across all 350 funds was +5.90% in 2025, and every single fund in the sample finished the year positive.

 

Indicator

Complementa 2026

Swisscanto 2026

Equities

34.1%

34.5%

Bonds

29.3%

27.3%

Real estate

~22.6%

~25%

Alternative investments

9.8%

5.3%

Illiquidity ratio

35.7%

—

Infrastructure

2.8% of total assets

—

Private equity

2.4% of total assets

—

Funding ratio
(year-end 2025)

114.4% (capital-weighted)

117% 
(private-law funds)

Note: PPCmetrics' 2026 Pensionskassen-Jahrbuch uses its own asset-class categorisation (separate CHF/foreign-currency bonds, separate Swiss/global equities) and is not directly comparable row-for-row with the table above; its figures are discussed in the text.

 

The gap between the two alternatives figures (9.8% versus 5.3%) reflects differing classification methodologies rather than a genuine disagreement – a reminder that «alternatives» remains a loosely defined category across the industry. The directional signal, however, is consistent across all three studies.

The endowment elements

A classical endowment approach – modelled loosely on large US university funds – combines high equity and private-markets exposure, broad diversification, long capital lock-ups and reduced reliance on nominal government bonds. Several of these features are now visible in the Swiss system.

The retreat from the bond anchor. Three decades ago, close to one in two francs held by Swiss pension funds sat in fixed income. That figure now stands at 29.3% (Complementa) or 27.3% (Swisscanto). This does not mean funds have abandoned defensiveness – it means they no longer construct it primarily through government and corporate bonds. Real estate, currency hedging, broader diversification and a wider set of risk premia are increasingly doing that work instead. PPCmetrics' own data points the same way: Swiss-franc bonds alone have fallen from 31.4% of assets in 2015 to 23.5% in 2025.

Equities as the strategic core. At roughly 34%, Swiss pension funds now hold an equity allocation that is high by historical domestic standards, for a system that is already paying out substantial pensions in a currency – the Swiss franc – that leaves little room for currency-driven return surprises. It remains well below the equity weightings that large US endowments have historically carried. The Swiss finding is more modest: institutions are accepting, to a greater degree than before, that long-term funding runs through market risk rather than around it.

Record crediting rates without abandoning caution. The clearest sign that 2025's gains reached savers rather than staying on balance sheets is the crediting rate itself: PPCmetrics puts the 2025 average at 4.43% – the highest since it began tracking the figure in 2008 – more than three times the BVG statutory minimum of 1.25%, with roughly 94% of funds crediting above that floor. Over eleven years, cumulative crediting of 32.35% has outpaced the statutory minimum's 13.23% by more than nineteen percentage points. That generosity has not come from running down reserves: the average funding ratio PPCmetrics reports stood at 121.1% (technical) and 118.4% (economic) at end-2025, climbing further to 122.4% and 120.5% respectively by end-August 2026 on a +4.79% year-to-date return – a third independent data point confirming that today's risk-taking starts from a position of strength.

Illiquidity normalised. This is where the endowment comparison is strongest. Complementa puts the system-wide illiquidity ratio at 35.7% of total assets, up from 28.2% fifteen years ago – meaning over a third of Swiss second-pillar capital cannot be sold quickly at market price. Diversification (87% of surveyed funds) and access to additional return sources (84%) are the leading stated motives; reduced flexibility (68%) and higher complexity (62%) the leading concerns. Yet only around a third of funds maintain an explicit ceiling on illiquid holdings – a governance gap widening alongside the allocation shift. PPCmetrics finds a related signal: nearly one in five funds (18.8%) exceeded at least one BVV 2 asset-category limit by end-2025 – most often on real estate – which is permitted but must be justified in the annual report.

Infrastructure over hedge funds. Within alternatives, the composition has changed as much as the total. Infrastructure now accounts for 2.8% of total assets (28% of the alternatives block) versus private equity's 2.4% (24%) – a reversal from the earlier dominance of hedge funds. The shift favours long-duration, real-economy cash flows with inflation linkage over liquidity-adjacent strategies. Forward-looking plans reinforce this: 31% of funds intend to increase Swiss real estate holdings, 28% plan higher infrastructure commitments, 21% intend to reduce foreign real estate exposure. PPCmetrics' longer lens (since 2015) shows the same combined alternatives-and-infrastructure allocation roughly doubling, from 2.7% to 6.2%.

Why this is not yet a Yale Model

The shift is real, but four structural factors keep it well short of a genuine endowment model.

Liability logic still dominates. Pension funds do not manage freely deployable endowment capital. They carry regulated benefit promises, ongoing pension payments, minimum interest-crediting requirements, funding-ratio targets and statutory recovery obligations – fundamentally different from university endowments' flexible spending rules. Strong funding ratios (114.4% at Complementa; above 117% at Swisscanto; 121.1% technical at PPCmetrics) widen the strategic margin, but don't replace liability discipline.

The equity allocation is high, but not radical. A roughly 34% equity weighting is a record for the Swiss second pillar, but not an aggressive endowment-style portfolio. Even adding private equity, total ownership-type exposure remains well below large US endowments' historical levels. This looks more like cautious, evolutionary risk-taking – bonds reduced, without concentrating into illiquid growth assets.

Alternatives remain loosely defined. The gap between Complementa's 9.8% and Swisscanto's 5.3% – and PPCmetrics' own combined alternatives-and-infrastructure figure of 6.2% – underlines that category boundaries and methodology matter as much as the headline number. The shared signal – alternatives have become mainstream without becoming dominant – is more robust than any individual figure.

Risk capacity does not explain performance. Swisscanto's data: in 2024, the top decile of funds earned 10.8% net versus 4.8% for the bottom decile, outperforming by roughly three percentage points annually since 2020. PPCmetrics reaches a similar conclusion from its own regression analysis of 2025 data: the statistical link between absolute return and crediting rate is positive but weak, explaining only ~2–4% of the variation – other factors, chiefly financial situation and risk capacity, matter more. This points toward governance quality, strategic asset allocation, implementation discipline, cost control, manager selection and boards' willingness to hold long-horizon risk through a cycle.

The bottom line: «Endowment Light»

Swiss pension funds are not on the road to Yale. But they have moved decisively away from the classical bond-anchored model. The emerging template is not a radical endowment but a more diversified pension portfolio: more market risk, more real assets, more illiquidity – and correspondingly more responsibility for the governance and liquidity discipline that has to sit underneath it. For allocators and asset managers engaging with the Swiss second pillar, the open question is no longer whether this shift is happening, but which boards will build the illiquidity governance to match the exposure they have already taken on.

 

Sources: Complementa, «Risiko Check-up 2026» (published September 2026); Swisscanto/Zürcher Kantonalbank, «Schweizer Pensionskassenstudie 2026» (published June 2026, 528 participating funds representing CHF 939 billion in assets); PPCmetrics, «Pensionskassen-Jahrbuch 2026» (published August 2026, 350 participating funds representing CHF 1,044 billion in assets and 4.5 million insured members).

Key takeaways

  • Not a Yale Model – yet. Liability-driven governance, funding-ratio discipline and pensioner obligations still separate Swiss pension funds from true endowments.

  • Equities are now the largest asset class, overtaking bonds for the second consecutive year at 34.1–34.5% of assets.

  • 2025 delivered the highest average crediting rate on record — 4.43% per PPCmetrics — more than three times the BVG statutory minimum of 1.25%.

  • Illiquidity has become mainstream, at 35.7% of total assets, but governance of that risk lags the allocation shift — nearly one in five funds exceeded a BVV 2 category limit in 2025.

  • Infrastructure has overtaken private equity within alternatives, replacing the earlier dominance of hedge funds.

  • Governance quality, not risk appetite, explains most of the return dispersion between top- and bottom-decile funds.

Frequently asked questions

Is the Swiss pension system moving toward a US-style endowment model?

Partially. Equity and illiquid allocations have risen to record levels, echoing endowment-style diversification. But liability-driven governance, funding-ratio requirements and pensioner obligations keep Swiss funds structurally different from endowments, which manage freely deployable capital under flexible spending rules.

What is the current equity allocation of Swiss pension funds?

Around 34.1% (Complementa) to 34.5% (Swisscanto) of total assets as of year-end 2025 — the highest level on record and, for the second year running, larger than the bond allocation.

Why have Swiss pension funds reduced their bond holdings?

Bonds fell to 27.3–29.3% of assets, roughly half their share thirty years ago. Funds have shifted the defensive role bonds once played onto real estate, currency hedging and broader diversification, rather than abandoning defensiveness altogether.

How much of Swiss pension fund assets are illiquid?

35.7% of total assets, according to Complementa — up from 28.2% fifteen years ago. This spans real estate, infrastructure and private equity. Only around a third of funds currently set an explicit ceiling on illiquid exposure.

Do higher-risk pension funds automatically earn higher returns?

Not primarily. Swisscanto data shows the gap between top- and bottom-decile funds is driven more by governance quality, strategic asset allocation and implementation discipline than by risk capacity alone – top performers outpaced the weakest by roughly three percentage points annually since 2020.

What is infrastructure's role in Swiss pension portfolios today?

Infrastructure (2.8% of total assets) has overtaken private equity (2.4%) as the largest category within alternatives, reflecting a shift away from the hedge-fund-heavy «alternative» allocations of the past toward long-duration, inflation-linked real assets.

How much interest did Swiss pension funds credit to retirement savings in 2025?

An average of 4.43% (median 4.00%) in 2025, according to PPCmetrics — the highest since it began tracking the figure in 2008. Roughly 94% of funds credited above the BVG statutory minimum of 1.25%.