schindler foundation annual report and financial ......land (ubs pension fund barometer -3.45%)....
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Contents
11 Balance Sheet12 Operating Account14 Notes14 I Principles and Organization
16 II Active Insured and Pensioners
16 III How the Objective is Fulfilled
17 IV Valuation and Accounting Policies, Consistency
17 V Actuarial Risks / Risk Cover / Cover Ratio
19 VI Notes Pertaining to the Investments and the Net Investment Result
24 VII Notes Pertaining to Other Balance Sheet and Operating Account Items
24 VIII Conditions Imposed by the Supervisory Authority
24 IX Additional Information Regarding the Foundation’s Financial Position
24 X Events Following the Balance Sheet Date
25 Auditor’s Report
4 Overview of the 2018 Financial Year
4 | Schindler Foundation | Overview of the 2018 Financial Year
Overview of the 2018 Financial Year
1. The Schindler Foundation’s Financial PositionThe Foundation closed the 2018 financial year with surplus expenses (before the write- back of fluctuation reserves) of CHF 289,000 (2017: surplus expenses of CHF 414,000). The cover ratio declined marginally to 102.94%, from 103.09% the previous year.
The retirement capital accruing to active insureds contracted from CHF 89.9 million to CHF 85.0 million.
2. Actuarial Performance 2018There were no new risk cases during the reporting year.
3. Interest on Retirement CapitalInterest was paid on individual retirement capital accounts on a monthly basis in line with the performances achieved by the various investment groups. In addition, bonus interest of 0.80% was paid on all investment groups in April 2018. This addi-tional interest was financed by a surplus that was paid by our re-insurer.
4. Investment ClimateThe financial year just ended saw institutional investors report significantly negative returns for the first time since the crisis year of 2008. Punitive tariffs, Brexit, rising interest rates in the USA and uncertainty about the future course of the global economy resulted in greater equity market volatility and unsettled investors. Most asset classes thus closed the year in negative territory.
The international equity markets were put through the mill in the last quarter of 2018, in particular, with an end-of-year sell-off instead of the expected rally. In Switzerland, second-line stocks were hardest hit, losing 17% of their value. Meanwhile, the MSCI World index fell by over 7.5%.
Yields in Switzerland softened again after an interim high in mid-2018, taking those on 10-year Confederation bonds back to -0.2%. By contrast, interest rates in the USA were increased steadily, with the differential between the CHF and USD now at around 3 percentage points.
The spring of 2018 saw the EUR peak for the year against the CHF, at 1.20, after which the exchange rate weakened steadily to 1.12. The USD/CHF exchange rate hovered between 0.90 and 1.00.
5Schindler Foundation | Overview of the 2018 Financial Year |
5. Performance of the Individual Investment Groups
a) Basic Strategy / Performance 2018: -1.46% (2017: +9.53%)At -1.46% (benchmark -5.11%), the basic strategy produced a negative result, but the losses were lower than those of the benchmark and other pension funds in Switzer-land (UBS pension fund barometer -3.45%).
Three investment segments were able to generate a clearly positive performance. Swiss real estate (+4.2% vs. benchmark -5.3%) benefited from the fact that invest-ments were made primarily via investment foundations. At +8.7%, private equity once generated a pleasing result. Infrastructure investments were the best performer (+9.6%), however, as the fund we used profited from the gratifying sale of an oil distribution company in the greater Paris area.
Commodities were the biggest loser, at -27.2%, although with a weighting of just over 1% they represent our smallest investment segment. Swiss and foreign equities each lost around 9% of their value. On the CHF-denominated bond front, a more risky strategy compared with Confederation bonds resulted in our performance lagging behind the benchmark (-1.2% vs. benchmark +0.2%).
6 | Schindler Foundation | Overview of the 2018 Financial Year
Strategy 2018The was adjusted with effect from June 1, 2018, by increasing Swiss real estate by five percentage points at the expense of bonds. Investments in Swiss real estate primarily take the form of relatively low-risk investment foundations.
Basic Strategy Basic Strategy Bandwiths
in % as from 1.6.2018 as per 31.12.2018 as from 1.6.2018
Liquidity 0.0% 2.7% 0–5%
CHF bonds 16.5% 10.0% +/-7.5%
Foreign currency bonds 5.5% 3.4% +/–5.0%
Swiss equities 15.5% 15.7% +/–3.0%
Foreign equities 15.5% 14.7% +/–3.0%
Swiss real estate 22.5% 29.4% +/-7.5%
International real estate 5.0% 3.8% +/–1.5%
Private equity 5.5% 7.3% +/–2.0%
Hedge funds 3.0% 2.1% +/–2.0%
Commodities 2.5% 1.1% +/–2.0%
Insurance-linked securities 2.5% 2.7% +/–2.0%
Infrastructure 3.0% 4.3% +/–2.0%
Alternative bonds 3.0% 2.8% +/–2.0%
100.0% 100.0%
Performance of the Basic Strategy, 2009-2018
In %
12.40 5.52 –1.07 7.94 7.20 8.69 2.60 4.91 9.53 –1.46
17.5
15.0
12.5
10.0
7.5
5.0
2.5
0.0
–2.5
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
7Schindler Foundation | Overview of the 2018 Financial Year |
b) Equity Pool / Performance 2018: -8.76% (2017: +19.46%)The equity pool generated a performance of -8.76% (benchmark -7.53%).
The overweighting of second-line stocks and the Emerging Markets meant that neither Swiss equities (-10.7% vs. benchmark -8.6%%) nor their foreign counterparts (-8.2% vs. benchmark -7.1%) were able to match their benchmarks’ performance.
Strategy 2018
in % Strategy Bandwidths
Liquidity 0.0% 0.0–5.0%
Swiss equities 30.0% 20.0–40.0%
Foreign equities 70.0% 60.0–80.0%
Performance of the Equity Pool, 2009-2018
In %
23.82 –0.13 –8.28 13.54 22.47 13.22 0.40 6.94 19.46 –8.76
30
25
20
15
10
5
0
–5
–10
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
8 | Schindler Foundation | Overview of the 2018 Financial Year
c) CHF Bonds / Performance 2018: -0.07% (2017: -0.07%)Amid low interest rates, bonds produced a result of -0.07%.
Performance of CHF Bonds, 2009-2018
In %
4.91 3.35 6.52 2.37 –3.00 7.99 1.89 1.23 –0.07 –0.07
9
8
7
6
5
4
3
2
1
0
–1
–2
–3
–4
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
d) Swiss Real Estate / Performance 2018: +4.69% (2017: +4.59%)Once again, monthly results from the CS Investment Foundation were entirely positive. Performance for the year came to +4.69%.
Performance of Swiss Real Estate, 2009-2018
In %
4.73 4.30 5.55 7.04 4.85 5.03 4.79 4.66 4.59 4.69
8
7
6
5
4
3
2
1
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
9Schindler Foundation | Overview of the 2018 Financial Year |
e) Hedge Funds / Performance 2018: -4.34% (2017: -0.85%)At -4.34%, hedge funds once again produced a disappointing result. Both of the funds we use closed the year well into negative territory.
Performance of Hedge Funds, 2009-2018
In %
0.05 10.08 –7.32 0.90 6.10 11.67 –0.98 1.11 –0.85 –4.34
12.5
10.0
7.5
5.0
2.5
0.0
–2.5
–5.0
–7.5
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
f) Current AccountInterest of 0.0% was paid on the current account in 2018.
Summary of Overall Performance in 2018
Asset Class Investment Group Schindler Foundation Benchmark
CHF bonds Basic strategy –1.11% 0.20%
CHF bonds –0.07%
Foreign currency bonds Basic strategy 1.39% –1.31%
Swiss equities Basic strategy –9.58% –8.57%
Equity pool –10.72%
Foreign equities Basic strategy –9.30% –7.90%
Equity pool –8.24%
Swiss real estate Basic strategy 4.15% –5.32%
Swiss real estate 4.69%
International real estate Basic strategy –3.99% –3.64%
Private equity Basic strategy 9.52% –13.08%
Hedge funds Basic strategy –1.56% –10.94%
Hedge funds –4.34%
Commodities Basic strategy –27.23% –10.22%
Insurance-linked securities Basic strategy –2.63% 0.07%
Infrastructure Basic strategy 9.65% –3.79%
Alternative bonds Basic strategy 2.78% –1.31%
10 | Schindler Foundation | Overview of the 2018 Financial Year
6. Investment Groups
Breakdown by Investment Group as at December 31, 2018
Investments Number
Investment Group by insureds in % of insureds
Basic strategy 81 458 467 95.8% 270
Current account 460 705 0.5% 4
Bonds 31 935 0.0% 2
Real estate 1 940 367 2.3% 19
Equities 1 011 893 1.2% 24
Hedge funds 98 479 0.1% 9
Total 85 001 846 100.0%
7. Compostion of the Board of TrusteesIn view of his forthcoming retirement in the Spring of 2019, Chairman of the Board of Trustees Heinz Risi stepped down with effect from December 31, 2018. The Board of Trustees would like to thank Heinz for his many years of successful hard work on behalf of the Foundation. The Board of Directors of Schindler Holding has appointed current trustee Günter Schäuble as the new Chairman, and Adrian Boutellier as new trustee and employer representative. As of January 1, 2019, the Board of Trustees will be composed as follows:
Employer representativesGünter Schäuble, Chairman, Corporate Finance & Tax Adrian Boutellier, Corporate Treasury Sabine Schibli, Compensation & Benefits
Employee representativesBernhard Gisler, FO HR & Training Erich Murer, Group Accounting and Reporting
On behalf of the Board of Trustees and the Management
Schindler Foundation
Günter Schäuble Mario Passerini Chairman of the Board of Trustees Managing Director
Ebikon, March 2019
11Schindler Foundation | Balance Sheet |
Balance Sheet
Assets
In CHF 31.12.2018 in % 31.12.2017 in %
Investments 92 566 877.30 100.0 96 886 560.68 100.0
Cash and cash equivalents 5 508 218.86 6.0 5 408 850.38 5.6
Miscellaneous credit balances 2 042 626.09 2.2 1 692 635.65 1.7
Assets with employer 2 393 448.70 2.6 4 309.60 0.0
Total liquid assets 9 944 293.65 10.7 7 105 795.63 7.3
CHF-denominated bonds 7 832 212.18 8.5 9 558 844.73 9.9
Foreign currency bonds 2 676 400.97 2.9 3 187 372.09 3.3
Total par-value investments 10 508 613.15 11.4 12 746 216.82 13.2
Swiss equities 12 969 359.50 14.0 15 124 640.22 15.6
Foreign equities 13 335 637.08 14.4 15 749 774.60 16.3
Total equities 26 304 996.58 28.4 30 874 414.82 31.9
Swiss real estate 26 505 878.00 28.6 25 501 944.47 26.3
International real estate 2 925 382.71 3.2 3 136 853.76 3.2
Real estate investment funds 29 431 260.71 31.8 28 638 798.23 29.5
Private equity 5 681 525.34 6.1 5 423 681.41 5.6
Hedge funds 2 251 382.66 2.4 3 490 490.80 3.6
Commodities 825 316.43 0.9 529 116.06 0.5
Insurance-linked securities 2 078 782.00 2.2 2 135 948.00 2.2
Infrastructure 3 357 201.17 3.6 3 180 904.70 3.3
Alternative bonds 2 183 505.61 2.4 2 761 194.21 2.8
Total alternative investments 16 377 713.21 17.7 17 521 335.18 18.1
Accrued income 0.00 0.0 33 392.97 0.0
Total assets 92 566 877.30 100.0 96 919 953.65 100.0
Liabilities
In CHF 31.12.2018 in % 31.12.2017 in %
Liabilities 3 439 626.25 3.7 2 535 698.65 2.6
Vested benefits 2 720 722.25 2.9 1 821 459.95 1.9
Banks/insurance companies/creditors 718 904.00 0.8 714 238.70 0.7
Accrued liabilities 65 915.12 0.1 19 235.82 0.0
Non-actuarial provisions 120 000.00 0.1 120 000.00 0.1
Retirement capital and actuarial provisions 86 400 708.20 93.3 91 414 864.15 94.3
Retirement capital, active insureds 85 001 845.95 91.8 89 889 103.70 92.7
Cover capital for pensioners 898 862.25 1.0 1 025 760.45 1.1
Actuarial provisions 500 000.00 0.5 500 000.00 0.5
Fluctuation reserves 2 540 627.73 2.7 2 830 155.03 2.9
Foundation capital, disposable assets 0.00 0.0 0.00 0.0
Balance at beginning of period 0.00 0.0 400 234.03 0.4
Reduction in/additions to disposable assets 0.00 0.0 –400 234.03 –0.4
Balance at end of period 0.00 0.0 0.00 0.0
Total liabilities 92 566 877.30 100.0 96 919 953.65 100.0
12 | Schindler Foundation | Operating Account
Operating Account
In CHF 2018 2017
Ordinary and other contributions and deposits 10 328 627.20 9 804 357.65
Employer contributions 7 855 340.20 7 868 294.65
Lump-sum deposits and benefit purchases 2 473 287.00 1 936 063.00
Inflow from contribs and vested benefits brought in A 10 328 627.20 9 804 357.65
Benefits under regulations –10 164 903.15 –5 177 707.70
Survivors’ benefits –136 892.00 –334 752.55
disability benefit 0.00 –145 217.10
Misc. benefits under regulations –191.05 –1 335.85
Lump-sum retirement benefits –10 027 820.10 –2 729 843.50
Lump-sum death and disability benefits 0.00 –1 966 558.70
Withdrawal benefits –1 781 306.70 –11 526 014.15
Vested benefits upon withdrawal –1 709 306.70 –11 250 203.10
Advance withdrawals: home purchase/divorce –72 000.00 –275 811.05
Outflows for be ne fits and advance withdrawals B –11 946 209.85 –16 703 721.85
Additions to/write-back of ret. cap. and act. prov. C 5 014 155.95 –518 326.65
Additions to/write-back of ret. cap., active insureds 4 571 674.45 9 456 769.60
Write-back/addition to cover cap., pensioners 126 898.20 –994 974.55
Interest on savings capital 315 583.30 –8 980 121.70
Income from insurance benefits D 1 114 575.80 2 428 315.55
Insurance benefits 9 993.80 1 479 616.55
Bonus payments on insurance policies 1 104 582.00 948 699.00
Insurance expense E –3 463 886.55 –3 359 378.20
Risk premiums –3 091 317.55 –3 038 711.20
Use of share of surplus –368 194.00 –316 000.00
Contributions to the Guarantee Fund –4 375.00 –4 667.00
Net result from insurance portion F (=A+B+C+D+E) 1 047 262.55 –8 348 753.50
13Schindler Foundation | Operating Account |
In CHF 2018 2017
Net investment income G –1 254 703.99 8 021 428.99
Investment income
Income from liquidity –26 466.20 –153 297.88
Income from CHF bonds –35 078.55 446 541.86
Income from foreign currency bonds 45 580.92 53 729.28
Income from Swiss equities –1 364 400.42 2 814 550.60
Income from foreign equities –1 316 039.24 2 622 507.47
Income from Swiss real estate 1 257 656.53 1 488 999.42
Income from international real estate –99 351.42 223 528.94
Income from private equity 633 524.34 602 535.50
Income from hedge funds 74 628.28 –18 611.08
Income from commodities –131 804.50 98 512.07
Income from insurance-linked securities –31 377.00 –195 916.00
Income from infrastructure 365 294.67 488 967.15
Income from alternative bonds 65 002.84 363 998.33
Portfolio management expense –691 674.24 –779 445.57
Interest on vested benefits (arrears)/miscellaneous –200.00 –35 171.10
Additions to non-actuarial provisions H 0.00 0.00
Other income I 27 781.80 25 667.35
Administrative expense J –109 867.66 –112 644.84
General administrative expense –87 246.06 –88 563.74
Auditors –9 115.45 –10 970.10
Accredited pensions actuary –6 785.10 –5 481.00
Supervisory authority –6 721.05 –7 630.00
Surplus income before additions to/write-back of fluctuation reserve K (=F+G+H+I+J) –289 527.30 –414 302.00
Write back/additions of fluctuation reserve L 289 527.30 14 067.97
Surplus income/expense M (=K+L) 0.00 –400 234.03
14 | Schindler Foundation | Notes
Notes
I Principles and Organization
Legal FormFoundation
Foundation ObjectivesThe purpose of the Foundation is to protect insured employees against the economic consequences of old age and disability, or to protect their surviving dependants in the case of the insured’s early death, in accordance with the Foundation’s regulations and in addition to the benefits provided by existing occupational benefits institutions.
Insured PersonsManagement and executive staff
Registered Under the Occupational Pensions Act (OPA)No
Security FundAffiliated to the Security Fund
DeedApril 11, 1973
Pension Fund RulesJanuary 1, 2012; addendum as at October 1, 2016
Investment RegulationsMay 1, 2017
Regulations Relating to Partial LiquidationJanuary 1, 2007
Regulations on the Creation of ProvisionsDecember 1, 2009
Organizational and Election RegulationsDecember 1, 2012
Rules on the Exercise of Shareholder Voting RightsJanuary 1, 2015
15Schindler Foundation | Notes |
Board of Trustees for 2018–2020
Employer representatives Employee representatives
Heinz Risi, Chairman (until 31.12.2018) * Bernhard Gisler
Günter Schäuble, Chariman as from 1.1.2019 * Erich Murer
Adrian Boutellier, as from 1.1.2019 *
Sabine Schibli * * Joint with a minimum of two signatures
ManagementMario Passerini, Managing Director* Antonietta Despeaux, Dep. Managing Director*
Signing Authority*=Joint with a minimum of two signatures
Accredited Pensions ActuaryToptima AG, Aarau
AuditorsErnst & Young AG, Bern
Supervisory AuthorityZentralschweizer BVG- und Stiftungsaufsicht (ZBSA) (office of occupational pension provision and foundation supervision for central Switzerland), Lucerne
Affiliated Companies
Number Number
of insureds of insureds
Company as per 31.12.2018 as per 31.12.2017
Schindler Elevator Ltd., Ebikon 86 91
Schindler Management Ltd., Ebikon 104 108
Schindler Digital Business, Ebikon 0 21
Schindler IT Services AG, Ebikon 16 0
Schindler Digital Group AG, Ebikon 7 0
Inventio AG, Hergiswil 6 7
Schindler Electronics Ltd., Locarno 0 4
AS Elevators Ltd., Küssnacht 5 6
Schindler Pension Fund, Ebikon 1 1
Executive staff abroad 23 23
Schindler Training Centre 1 1
Schindler Vorsorge Ltd, Ebikon 0 1
Schinach AG, Hergiswil 0 1
Schindler Supply Chain Europe AG, Hergiswil 9 0
Schindler Holding AG, Hergiswil 12 11
Total 270 275
16 | Schindler Foundation | Notes
II Active Insured and Pensioners
Active Insured
31.12.2018 31.12.2017 Change
Men 248 255 –7
Women 22 20 2
Total 270 275 –5
2018 2017
Number as at 1.1 275 267
Insureds joining 19 32
Insureds leaving –16 –17
Retirements –8 –5
Cases of death 0 –2
Number as at 31.12 270 275
Pensioners
31.12.2018 31.12.2017 Change
Disability pensions 0 0 0
Surviving spouse’s pensions 1 2 –1
Children’s/orphan’s pensions 0 0 0
Total 1 2 –1
III How the Objective is Fulfilled
Organizational StructureExtra-mandatory and partially independent pension fund
Insured SalaryMonthly salary x 12 plus year-end bonus plus 75% of target bonus, less coordination deduction of CHF 112,320; maximum CHF 687,960
Benefits
Savings Defined contribution
Disability pension 70% of pensionable salary
Life annuity 56% of pensionable salary
Orphan’s pension 7% of pensionable salary
FinancingBenefits under the Rules are financed by the employer.
17Schindler Foundation | Notes |
IV Valuation and Accounting Policies, Consistency
Valuation PoliciesListed securities are carried at their market value as at December 31, 2018, and alternative investments at their last reported values for the year.
Accounting PoliciesThe present annual report has been prepared in accordance with Swiss GAAP ARR 26.
V Actuarial Risks / Risk Cover / Cover Ratio
Actuarial RisksThe actuarial risks are reinsured.
Retirement Assets, Active Insured
In CHF million 31.12.2018 31.12.2017 Change
Retirement assets 85.0 89.9 –4.9
Cover Capital for Pensioners
In CHF million 31.12.2018 31.12.2017 Change
Cover capital 0.9 1.0 –0.1
Changes in Retirement Assets
In CHF 2018 2017
Capital on 1.1 89 889 103 90 075 638
Purchased benefits (AVCs) 2 473 287 1 936 063
Savings contributions 4 764 166 4 829 583
Divorce/home own./lump-sum death ben. –72 000 –1 952 590
Lump-sum payment upon withdrawal –10 027 820 –2 729 844
Vested benefits upon withdrawal –1 709 307 –11 250 203
Interest on retirement assets –315 583 8 980 455
Retirement assets as at 31.12 85 001 846 89 889 103
Interest on Retirement AssetsThe interest paid on individual retirement capital assets depended on the performance of the specific investment groups selected by the insured.
18 | Schindler Foundation | Notes
Increase in PensionsSpouses’ and orphans’ pension have not been increased since 2003.
Actuarial ReportThe most recent actuarial report was produced as at December 31, 2016.
Actuarial Provisions
In CHF 2018 2017
Provisions for risk insurance 500 000 500 000
Total provisions 500 000 500 000
This provision is designed to cover those cases in which the risk benefits under the Rules are greater than the benefits that have been reinsured. It currently stands at the minimum level of CHF 0.5 million.
Non-Actuarial Provisions
In CHF 2018 2017
Non-actuarial provisions 120 000 120 000
Total provisions 120 000 120 000
Cover Ratio under Occupational Pensions Ordinance 2 (OPO2)
In percent
31.12.2009 104.36%
31.12.2010 102.97%
31.12.2011 102.84%
31.12.2012 103.30%
31.12.2013 103.47%
31.12.2014 103.40%
31.12.2015 103.56%
31.12.2016 103.58%
31.12.2017 103.09%
31.12.2018 102.94%
19Schindler Foundation | Notes |
VI Notes Pertaining to the Investments and the Net Investment Result
Investment RegulationsMay 1, 2017
Board of TrusteesThe Board of Trustees determines the investment strategy, bandwidths and guidelines pertaining to the individual investment segments.
ManagementThe Management is responsible for managing invested assets in accordance with the Investment Regulations.
BondsInvestments take the form of individual positions and collective vehicles.
EquitiesEquity investments mainly take the form of collective investment schemes.
Investment Vehicles
Manager Name
Hedge funds
FRM ARS I (CHF) / in liquidation
LGT Managed Futures (USD)
MFO Capital MFO Diversified
Private equity
Partners Group PG Global Opportunities
Partners Group Commerzbank P3 certificate
Partners Group PG Direct Equity 2016
Partners Group Pearl Holding
Commodities
FRM FRM Commodity / in liquidation
Insurance-linked securities
LGT LGT ILO Fund (CHF)
Infrastructure investments
LODH Macquarie Infrastructure fund (LMIF)
Alternative bonds
Partners Group European Mezzanine
Partners Group Private Markets Credit Strategies
20 | Schindler Foundation | Notes
Real EstateInvestments are effected via investment companies, investment foundations and investment funds.
Investment IncomeNet investment income comprises the following:
In CHF 2018 2017
Investment income
Income from liquidity –26 466 –153 298
Income from CHF bonds –35 079 446 542
Income from foreign currency bonds 45 581 53 729
Income from Swiss equities –1 364 400 2 814 551
Income from foreign equities –1 316 039 2 622 508
Income from Swiss real estate 1 257 657 1 488 999
Income from international real estate –99 351 223 529
Income from private equity 633 524 602 536
Income from hedge funds 74 628 –18 611
Income from commodities –313 805 98 512
Income Insurance linked Securities –31 377 –195 916
Income from infrastructure 365 294 488 967
Income from alternative bonds 65 003 363 998
Portfolio management expense –691 674 –779 446
Interest on vested benefits/withdrawal –200 –35 171
Net investment income –1 436 704 8 021 429
21Schindler Foundation | Notes |
2018 Performance2018 performance (after expenses) was -1.46% for the basic strategy and -8.76% for the equity pool. These calculations were made by the global custodian.
Portfolio Management Expense
In CHF 31.12.2018 31.12.2017
Investments 92 566 877 96 919 953
of which:
cost-transparent investments 89 079 679 94 403 764
non-transparent investments (see overview below) 3 487 198 2 516 189
Percentage of cost-transparent investments 96.2% 97.4%
2018 2017
Portfolio management expense
Portfolio management expense carried directly 53 972 56 799
Indirect portfolio management expense (as per TER) 637 702 722 646
Carrying amount of portfolio management expense 691 674 779 445
as % of cost-transparent investments 0.78% 0.83%
As in 2017, the expense item of CHF 691,674 carried in the 2018 operating account comprises direct costs (custody fees, costs for portfolio managers, stamp duty, etc.) as well as additional TER (Total Expense Ratio) costs for the funds used. TER costs were calculated in accordance with the requirements of the Occupational Pension Supervisory Commission on the basis of holdings at the end of the year, and thus represent only a rough approximation.
22 | Schindler Foundation | Notes
Non-Cost-Transparent Collective Investment Schemes
in CHF
Investment vehicle Provider ISIN number 31.12.2018
CMZ/CS 21 CS CH0123871573 0
CS Euroreal CS DE0009805002 116 781
Outperf. Zertifikat Credit Suisse CS CH0344685539 263 451
Tracker Zertifikat Leonteq Leonteq CH0373630224 541 000
9.28% Zertifikat Vontobel Bank Vontobel CH0382899547 376 922
Partners Group Direct Equity 2016 Partners Group n.a. 1 731 825
14.5% Zertifikat Vontobel Bank Vontobel CH0436998196 433 640
FRM Commodity Strategies FRM n.a. 9 855
FRM ARS I FRM n.a. 13 724
Total 3 487 198
Continued investment in non-transparent collective investment schemes is approved as part of the annual investment policy adoption process.
Open Commitments
In CHF million Commitment Value as at
Programme Provider Total Open 31.12.2018 31.12.2017
PG Europ. Mezzanine 2008 Partners Group 1.1 0.1 0.4 0.4
PG Direct Equity 2016 Partners Group 2.3 0.6 1.7 0.7
PG Private Markets Credit Strategies Partners Group 1.6 0.0 1.4 1.8
Fluctuation ReservesThe fluctuation reserves are used to offset price losses on investments. As the insureds have carried all investment risks (except for the risks associated with the current account asset class) since January 1, 2004, the cover ratio bandwidth was fixed at 101.5% to 103.0%. At a cover ratio 102.94% on December 31, 2018, the fluctuation reserves have almost reached their maximum level.
Expansion of Investment Options in Accordance with Art. 50.4 / Art. 55 OPO2Alternative investments (17.7%) exceed the maximum limit of 15% laid down in OPO2. The maximum foreign currency allocation of 30% is also exceeded by 1.8 percentage points.
This is the result of two factors: the investment groups chosen by the insureds, and the broadly diversified international investment strategies determined by the Board of Trustees.
23Schindler Foundation | Notes |
DepositoryCredit Suisse has been appointed as the global custodian (depository).
Financial ControllingThe Board of Trustees receives detailed monthly reports from the Management. Perfor-mance figures are also published on the website every month (www.schindler-pk.ch).
Derivative Financial InvestmentsThe use of derivative financial investments is governed by the Investment Regulations and complies with the requirements of OPO2. With the exception of structured products and forward foreign exchange transactions, no derivatives were used during 2017.
Securities LendingThe Foundation does not engage in securities lending.
Investments in the EmployerNo investments (shares / participation certificates / bonds) were made with employer companies.
The Foundation has an account with Schindler Holding AG that is used to collect contributions. The balance in favour of Schindler Holding on December 31, 2018, stood at CHF 2,393,448.
Credit interest rate with Schindler Holding AG at December 31, 2018: 0.00% p.a.
Pension Fund GovernanceAll of the members of the Board of Trustees, and the Managing Director, are required to confirm in writing once a year that they have complied with both the ASIP Charter and the specific Schindler Code of Conduct. At the same time, they must also disclose any other interests.
RetrocessionsThe Foundation received retrocessions totalling CHF 16,712 from a variety of fund providers during the year just ended. This amount was set off against portfolio management expense.
Exercise of Shareholder Voting RightsOn December 2, 2014, the Board of Trustees adopted Rules on the Exercise of Participation Rights in Companies Limited by Shares, which entered into force on January 1, 2015. The Board of Trustees exercised shareholder voting rights in the interests of the insureds in the case of one investment in individual stocks. The details are published on the website.
24 | Schindler Foundation | Notes
VII Notes Pertaining to Other Balance Sheet and Operating Account Items
Non-Actuarial ProvisionsProvisions of CHF 120,000 have been made to finance any costs of medical examinations for insureds that are provided for in the Rules and not otherwise covered.
Share of Surplus from Insurance CompaniesFollowing positive risk performance during the 2016 financial year, the reinsurer paid out a surplus of CHF 0.95 million in 2017. Two-thirds of this was distributed among the insureds in the form of bonus interest on all investment groups, paid in April 2017. The remainder was used to reduce the risk contributions paid by affiliated companies.
VIII Conditions Imposed by the Supervisory AuthorityThe annual financial statements up to the 2017 financial year were approved without any conditions being imposed.
IX Additional Information Regarding the Foundation’s Financial PositionSome securities – up to a maximum of CHF 1.0 million – are pledged to Credit Suisse as collateral for forward foreign exchange transactions.
X Events Following the Balance Sheet DateNone.
25Schindler Foundation | Auditor’s Report |
Ernst & Young Ltd
Schanzenstrasse 4a
P.O. Box
CH-3001 Berne
Phone: +41 58 286 61 11
Fax: +41 58 286 68 18
www.ey.com/ch
To the Foundation Board of
Schindler-Stiftung
Berne, 10 April 2019
Report of the statutory auditor on the financial statements
As statutory auditor, we have audited the accompanying financial statements of Schindler-Stiftung,
which comprise the balance sheet, operating accounts and notes, for the year ended
31 December 2018.
Foundation Board’s responsibility
The Foundation Board is responsible for the preparation of the financial statements in accordance with
the requirements of Swiss law and with the foundation’s deed of formation and the regulations. This
responsibility includes designing, implementing and maintaining an internal control relevant to the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error. The Foundation Board is further responsible for selecting and applying appropriate accounting
policies and making accounting estimates that are reasonable in the circumstances.
Responsibility of the expert in occupational benefits
In addition to the auditor, the Foundation Board appoints an expert in occupational benefits to conduct
the audit. The expert regularly checks whether the occupational benefit scheme can provide assurance
that it can fulfil its obligations and that all statutory insurance-related provisions regarding benefits and
funding comply with the legal requirements. The reserves necessary for underwriting insurance-related
risks should be based on the latest report provided by the expert in occupational benefits in accordance
with article 52e paragraph 1 of the Occupational Pensions Act (OPA) and article 48 of the Occupational
Pensions Ordinance 2 (OPO 2).
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers the internal control relevant to the entity’s
preparation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control system. An audit also includes evaluating the appropriateness of the accounting policies
used and the reasonableness of accounting estimates made, as well as evaluating the overall
presentation of the financial statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
Auditor’s Report
26 | Schindler Foundation | Auditor’s Report
2
Opinion
In our opinion, the financial statements for the year ended 31 December 2018 comply with Swiss law
and with the foundation’s deed of formation and the regulations.
Report on additional legal and other requirements
We confirm that we meet the legal requirements on licensing (article 52b OPA) and independence
(article 34 OPO 2) and that there are no circumstances incompatible with our independence.
Furthermore, we have carried out the audits required by article 52c paragraph 1 OPA and article 35
OPO 2. The Foundation Board is responsible for ensuring that the legal requirements are met and that
the statutory and regulatory provisions on organization, management and investments are applied.
We have assessed whether:
organization and management comply with the legal and regulatory requirements and whether an
internal control exists that is appropriate to the size and complexity of the foundation
funds are invested in accordance with legal and regulatory requirements
measures have been taken to ensure loyalty in fund management and whether the Governing Body
has ensured to a sufficient degree that fund managers fulfill their duties of loyalty and disclosure of
interests
the available funds or discretionary dividends from insurance contracts have been used in
compliance with the legal and regulatory provisions
the legally required information and reports have been given to the supervisory authority
the pension fund’s interests are safeguarded in disclosed transactions with related entities
We confirm that the applicable legal and statutory requirements have been met.
We recommend that the financial statements submitted to you be approved.
Ernst & Young Ltd
Licensed audit expert Licensed audit expert
(Auditor in charge)
Enclosure
Financial statements (balance sheet, operating accounts and notes)
Patrick Schaller(QualifiedSignature)
Raymond Frey(QualifiedSignature)
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