In 2016, all 607 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 Liechtensteinische Landesbank. The pension fund and its defined contribution scheme offer three attractive savings plans that go beyond the requirements of the law (Occupational Pension Act (OPA)). In addition, LLB’s contributions as an employer amount to two-thirds of the financing of the fund.
As at the end of December 2016, the liquidity ratio of the LLB pension fund stood at 109.3 percent (as at the end of December 2015: 107.8 %) and had thus increased by 1.5 percent on the previous year. The return on investment was 3 percent (2015: minus 0.5 %). The accumulated capital bore interest of 2 percent in 2016. The pension plan assets amounted to CHF 290.5 million (2015: CHF 277.4 million).
The low interest rate environment and the steady increase in life expectancy have induced the Board of Trustees to gradually reduce the pension conversion rate from 1 January 2018 for the retirement age of 64 by 0.1 percent per year to 5.1 percent (currently 5.6 %). As of 1 January 2023, the normal retirement age of the Liechtenstein AHV (state pension) will be raised to 65. At that time, the pension conversion rate will amount to 5.22 percent (currently 5.72 %).
Without lowering the conversion rate, the gap between the capital that is actually available and the capital that is necessary to provide the old-age pension granted would become wider and wider. Through this measure, the long-term financing and provision can be kept in equilibrium.