The Pictet LPP-Index was created in 1985 with the introduction of new regulations governing the investment of pension fund assets. Since the investment limits were last set in 1993, the index is known as the Pictet LPP-Index 93. Since then it has established itself as the authoritative pension fund index for Switzerland.
The amendments made to OPP2 on 1 April 2000, which emphasise among other things the own responsibilities of pension funds, should be seen as a first step towards deregulation and will provide further impetus to the individualisation trend in swiss pension funds. The Pictet LPP-Index 93 is therefore no longer as representative for many pension funds. Nevertheless the LPP-Index 93 will also be calculated in the future.
We are therefore convinced that a family of three indices is a better way of satisfying the different requirements of pension funds. Although the allocation of the three indices may not exactly match the strategic allocation of a specific fund, one of them should come very close to the fund's risk profile and therefore be suitable as a benchmark.
The innovations of the LPP 2000 include: