Swiss federal pension fund, PUBLICA, saw its assets shrink nearly CHF600m last year to CHF32.5bn at the end of 2007, resulting in a 2.1% decrease in the funding ratio to 106.7%.
Commenting in the 2007 Annual Report, Werner Hertzog, director of PUBLICA, said: "2007 brought our investment team a lot of work and little return. Such lean investment years are normal, however, it was not possible to forecast the exact arrival point or the extent of the financial market correction.
"This clearly showed that the necessary return does not come without risk."
PUBLICA, Switzerland's largest and oldest fund, is changing from a DB to a DC model on 1 July 2008 when the PUBLICA-Gesetz bill comes into effect. The bill also transfers responsibility for risk management, investment strategy and investment guidelines to the fund's Executive Committee.
This role has previously been undertaken by the Federal Government.
A spokesperson said: "The competence of the Committee will be enlarged so the role of its members will become more important."
At the beginning of May, Barbara Schaerer, director of Switzerland's Federal Office for Personnel, joined the Executive Committee. Schaerer was previously deputy director of the Swiss Federal Finance Administration. She replaced Juan Gut, who announced his retirement at the end of April.
PUBLICA currently has approximately 53,500 contributing members and around 51,000 pensioners.
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