In 2015, all 579 employees of our corporate Group who work in Liechtenstein were covered by the retirement, life and disability insurance plans of the independent Personnel Pension Fund Foundation of the Liechtensteinische Landesbank. Our pension fund and its defined-contribution scheme offer all insured persons an attractive savings plan that goes beyond the requirements of the law (Occupational Pension Act (OPA)). In addition, the LLB’s contributions as an employer amount to two thirds of the financing of the fund. The Personnel Pension Fund Foundation takes its responsibility seriously of preserving and increasing pension plan assets in the long term and has chosen a balanced and security-oriented investment strategy.
As at the end of December 2015, the liquidity ratio stood at 107.8 percent (as at the end of December 2014: 110.8 %) and had declined by 3 percent on the previous year. The value fluctuation reserve stood at CHF 19.9 million (2014: CHF 26.9 million), which is about 50 percent (as at the end of December 2014: 68 %) of our target goal of 116 percent. This is primarily due to financing the reduction in the technical interest rate to 2 percent (2014: 2.5 %). The return on investment decreased to minus 0.5 percent (2014: 6.5 %). The pension plan assets amounted to over CHF 277.4 million (2014: CHF 275.7 million). The ratio of four actively insured persons to one retired person remained unchanged in 2015.
Given the low interest rate environment and rising life expectancy, the Board of Trustees will examine in 2016 the gradual reduction in the pension conversion rate to the actuarially appropriate rate. The pension conversion rate, which converts retirement assets upon retirement at the age of 64 into a pension, is currently 5.6 percent. The accumulated capital bore no interest in 2015.
The Personnel Pension Fund Foundation of the LLB has a high risk capacity with which it can manage fluctuations in assets. The main challenge is to ensure financial stability against the backdrop of low-level interest rates and volatile investment markets.