Pension Funds

Pension funds and institutional investors have for some time been allocating to alternative investments, including private equity, to seek additional returns and diversification. This is welcome progress…

The Swiss federal government has published draft legislation aimed at preventing local governments from being represented on the boards of regional pension fund supervisors.

The proposal runs counter to that of a parliamentary initiative on the subject and means that there is now “competition” between the two, according to Dominique Favre, director at As-So, the supervisory authority for occupational pensions in western Switzerland.

The reform proposal, announced by the government last week, was presented mainly as “modernising” the first pillar, but it also touches on aspects of the second pillar.

Sustainable future means helping citizens achieve the best income in retirement on a sustainable basis.

The National Council approved, by 101 votes against 91 with 4 abstentions, the proposals of the Conciliation Conference over the Retirement Provision 2020. Earlier, the Council of States had supported the project with 27 votes against 17. The dossier is now ready for final voting. Now the people will have to give its opinion on September 24th.

In his final address to the House on Thursday, Interior Minister Alain Berset on behalf of the government stressed the crucial importance of the reform for “Switzerland, the people, the economy and the stability of the institutions”.

Pension funds with defined benefit schemes were fewer in Switzerland in 2015 than 10 years earlier, according to official statistics released today. The figures showed 230 funds disappeared, according to the country’s federal statistics bureau (BFS): the number of pension funds with defined benefit (DB) plans (Leistungsprimat) fell from 289 to 58 between 2005 to 2015, with only 15 public.

Whereas one in five individuals were in DB schemes in 2005, in 2015 this ratio was down to 1 in 15, according to the statistics. The BFS said that the decline in the number of Pensionskassen running DB plans went hand-in-hand with a decline in the number of scheme members.

The Swiss pension system has lost positions in the world, according to consulting company Mercer’s research. The survey, which analyzed 27 countries, ranked Switzerland in sixth place, two places lower down than the previous ranking.

The deterioration in the ranking reflects the decline in the level of pensions in relation to earnings, says a press release today at Mercer. The Swiss system lost some rank even in the sustainability criteria, since the increase in life expectancy is not compensated by the contributions or from an age of higher retirement.

Women will retire at 65. After the States General, also the Swiss National Council approved – by 137 votes to 57 – the raising of a year of their retirement age in the examination of the Pension Provision 2020 program, bringing it into line with the retirement age for men.

Bad news for Swisscom employees wishing to take early retirement. According to the opinion of Syndicom, professional trade union, the biggest Swiss telecom operator plans to review its policy on pension fund by cutting the services offered.

The Complan Foundation Board, which manages the cash assets of the second pillar of Swisscom employees, think of suppressing the bridging pension for those who opt for early retirement, as Syndicom makes public today in a note; simultaneously, the conversion rate and the technical reference rate should be revised downwards.