The following pension funds have been instrumental to the project s successful outcome:

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Francis Rice
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1 December 2010 Special Edition Aon Hewitt News LPP/BVG 2010 Actuarial Tables In collaboration with fourteen large autonomous pension funds, Aon Hewitt and LCP Libera, Switzerland s two leading consulting firms in the field of pensions, have compiled and published the LPP/BVG 2010 actuarial - the third and latest edition of the LPP/BVG series of actuarial. More than ten years ago, several of the largest autonomous Swiss pension funds decided to pursue the idea of creating such, and since then they have been providing the necessary statistics for the compilation of the LPP/BVG actuarial. Recently, because of trends in increasing life expectancy, generational-based mortality reflecting future improvements in life expectancy have increasingly been used in addition to conventional static. Whereas static mortality show only the life expectancy of all generations over a relatively short observation period, generational-based take into account the year of birth in addition to age and gender and therefore reflect the increasing longevity of younger generations. 1 The LPP/BVG 2010 are the first in the LPP/BVG series of to reflect generational-based mortality. Statistical data The following pension funds have been instrumental to the project s successful outcome: ABB Pensionskasse, Pensionskasse Alcan Schweiz, Pensionskasse Ciba, CPV/CAP Pensionskasse Coop, Pensionskasse der Credit Suisse Group (Schweiz), PKE Pensionskasse Energie Genossenschaft, Migros- Pensionskasse, Fonds de Pensions Nestlé, Pensionskasse des Bundes PUBLICA, Personalvorsorge der Swiss Re, Pensionskasse SBB, Caisse de pensions Swatch Group, Sulzer Vorsorgeeinrichtung, Pensionskasse der UBS. We wish to thank these pension funds for their co-operation, the time and effort invested in order to collect the data required and their financial contribution. The LPP/BVG 2010 actuarial are based on the statistical experience of the participating pension funds over the period from 2005 to The population at risk in the five-year observation period consisted of 1,207,600 active members and 776,614 pensioners, large enough to ensure that the findings are statistically significant. The factors in the are used for the calculation of benefits at retirement, death, disability or termination of employment. Moreover, the also include information on the proportion of the retirement savings capital withdrawn in connection with home ownership and following a divorce. The main parameters of the LPP/BVG (e.g. the interest rate) can be changed to allow for individual pension fund requirements, and the are also suitable for calculating pension liabilities in accordance with international accounting standards such as IFRS/IAS 19 or US GAAP. The are now available to accredited pension fund experts, actuaries and pension funds. 1 See also Aon Hewitt News December 2010

More than ten years ago, several of the largest autonomous Swiss pension funds decided to pursue the idea of creating such, and since then they have been providing the necessary statistics for the

2 Life expectancy According to the new LPP/BVG 2010 mortality, life expectancy at age 65 has improved in the last five years by about one year, to 18.9 years, for men and nearly half a year, to 21.4 years, for women, compared with the LPP/BVG 2005 mortality. Table 1 compares life expectancy ê 65 at age 65 under the various actuarial : Table1: Life expectancy ê 65 Men Women Widowers Widows LPP/BVG 2010 actuarial VZ 2005 actuarial LPP/BVG 2005 actuarial LPP/BVG 2000 actuarial EVK 2000 actuarial VZ 2000 actuarial VZ: Versicherungskasse der Stadt Zürich, now Pensionskasse Stadt Zürich EVK: Eidgenössische Versicherungskasse, now Pensionskasse des Bundes PUBLICA Life expectancy under LPP/BVG 2010 is calculated for 2007 and for men at age 65 is practically identical with the VZ 2005 mortality applicable for Women s life expectancy at age 65, on the other hand, is nine months shorter under the LPP/BVG 2010 than under the VZ Life expectancy is expected to continue rising in the future. However, statisticians expect the trend to slow and the gap between male and female life expectancy to narrow. Conversion rate In the referendum of 7 March 2010, the Swiss people rejected a reduction in the LPP/BVG minimum conversion rate from 6.8 % to 6.4 %. Based on the LPP/BVG 2010 actuarial and assuming a 3.5 % technical interest rate and a weighting of 70 % for men and 30 % for women, in 2010 that rate would have been practically equal to the actuarially equivalent conversion rate of 6.41 %. Assuming a technical interest rate of 3 %, the conversion rate should be 6.08 %.

Table 1 compares life expectancy ê 65 at age 65 under the various actuarial : Table1: Life expectancy ê 65 Men Women Widowers Widows LPP/BVG 2010 actuarial 18.93 21.42 18.93 21.75 VZ 2005 actuarial 18.

3 Table 2 shows the 2007 conversion rate for men at ages with several different interest rates assuming that the spouse s pension equals 60 % and the retired member s child pension equals 20 % of the retirement pension. Table 2: The same calculation can be made for 2011, whereby life expectancy under the static would have to be projected for four years on the basis of the assumptions included in the model. Table 3 compares the 2007 conversion rate calculated with an interest rate of 3.5% with the projected values for 2011 (static P) and shows the 2011 conversion rates calculated on the basis of the generational (G). Table 3: Using an interest rate of 3.5%, the conversion rate in 2011 for men at age 65 should thus be 6.29% (static ) or 6.03% (generational ). z

Table 2: The same calculation can be made for 2011, whereby life expectancy under the static would have to be projected for four years on the basis of the assumptions included in the model.

4 Disability The analysis of disability cases shows that the number of such cases has declined significantly by about 24% overall compared with the LPP/BVG 2005 data. Table 4 shows the change by gender and age group: Table 4: Reduction in disability rates LPP/BVG 2010 compared with LPP/BVG 2005 Age group Men Women Up to % % % % % % % % % % Average (weighted) % % The LPP/BVG 2010 analysis is based on the observations in the years 2005 to 2009 and the LPP/BVG 2005 analysis on the years 1999 to The findings were likely influenced by economic developments and changes in federal disability insurance legislation. Recent federal disability insurance practice shows that AI/IV offices are implementing more restrictive legal rules and guidelines, with fewer new pensions as a result. Institutional collaboration and increasingly widespread case management further contribute to the reduction in the number of disability cases. Summary of main findings The participating autonomous pension funds and their consultants are committed to the second pillar pension system, and the new LPP/BVG 2010 life are a modern and essential working instrument. As expected, compared with the LPP/BVG 2005 actuarial, the LPP/BVG 2010 show an increase in life expectancy for men. For women, the increase in life expectancy fell slightly short of expectations. The number of disability cases has declined significantly leading to a notable reduction in the disability rates. The analysis of partner pension data shows an increase in the number of partner pensions paid to surviving male partners; for female partners only slight age-related shifts were observed. Regarding children's pensions, orphan s and disabled member child pensions for men declined slightly, while the figures were stable for women. Probabilities of termination of employment were stable for men and slightly lower for women. Withdrawals in connection with home ownership were almost in line with the LPP/BVG 2005 and Transfers following divorce, on the other hand, were significantly higher for men over age 40, while remaining quite rare for women. For orders and further information on the LPP/BVG 2010 mortality :

4 % 35 44-34.7 % - 14.6 % 45 54-37.8 % - 24.6 % 55 65-33.8 % - 33.6 % Average (weighted) - 26.5 % - 17.

5 Contact Aon Hewitt Hewitt Associates SA Lagerstrasse 33 Postfach 8021 Zurich Phone: Avenue Edouard-Dubois Neuchâtel Phone: Avenue Edouard Dubois 4 Case postale Nyon 1 Phone: Aon Hewitt contact Mr Olivier Vaccaro Phone: olivier.vaccaro@hewitt.com / aonhewitt.com Aon Hewitt Aon Consulting AG Spitalackerstrasse 22A Postfach Bern 25 Phone: Route de Meyrin 123 Case postale Geneva 15 Aéroport Phone: Bederstrasse 66 Postfach 8027 Zurich Phone: Aon Hewitt contact Mr Ernst Rätzer Phone: ernst.raetzer@aon.ch / aonhewitt.com Key data 2011 now available in the App Store! The Aon key data app is a free application developed by Aon Hewitt for Switzerland s HR and occupational benefits community. It offers you quick and accurate access to key numerical social security and occupational benefit data. More than 20 key figures from 1985 to 2011 at your fingertip. The figures are updated regularly so they are valid today, and remain valid tomorrow.

com Aon Hewitt Aon Consulting AG Spitalackerstrasse 22A Postfach 699 3000 Bern 25 Phone: +41 31 340 20 00 Route de Meyrin 123 Case postale 336 1215 Geneva 15 Aéroport Phone: +41 22 721 03 03

Mortality and life expectancy, especially concerning non-mandatory occupational pension plans 10.2003/ P-H Bader/ FOPI Life Section

Mortality and life expectancy, especially concerning non-mandatory occupational pension plans 10.2003/ P-H Bader/ FOPI Life Section I. Summary Those people who would like to secure a lifelong pension for