SWITZERLAND - Almost 73% of voters rejected a proposal in a Swiss referendum yesterday to cut the conversion rate on Swiss second pillar pensions.

The structural reform of the mandatory pensions system presses on but the Swiss pension fund association, ASIP, is planning to host a round table in a bid to find a solution to funding problems.

The majority of voters in all Swiss cantons have rejected plans to cut the conversion rate from 7% for men and 6.95% for women to 6.4% by 2016. The rate is already set to decrease to 6.8% for both sexes by 2014. (See earlier IPE story: ASIP hopes for mood change on Swiss referendum) 

However, the Swiss pension fund association is convinced the result was mainly driven by lack of information and anger about the fee structures of some insurance-based schemes, rather than it relating to any strong feelings about pensions benefits.

"Although life insurance companies only cover around 20% of the market for retirement provision, the opponents of the conversion rate cut placed the life insurers in the centre of criticism as profit-oriented companies," ASIP claimed in a statement.

"The result is therefore more likely to be viewed as a protest ‘no' against insurers and against excessive salaries and bonus payments, in particular," the organisation added.

A government spokesman admitted that the result "was to be expected but maybe not in that magnitude".

ASIP now wants representatives from all sides of participants in the second pillar pensions regime to come together and discuss "common aims - security, trust, efficiency, transparency".

It has also demanded the lifting of stamp duty on Pensionskassen "which increases management fees on the back of the members" and sought more transparency around procurement fees relating to second pillar contracts.

The organisation also pointed out the importance of including soon-to-be-passed structural reform of the second pillar within its discussions.

Proposed reforms will include a change to the supervisory structure, as well as new regulations on good pension fund governance and more transparency. (See earlier IPE article: Clear boundaries ahead)

Some of the criticism voiced in the campaign before the referendum concerned better supervision of Pensionskassen.

Anton Streit, deputy director for pensions at the Swiss federal ministry for social insurance (BSV), said discussions are in their closing stages and should pass through both houses of the Swiss parliament "within the next two weeks".

"An implementation of the new regulations from January 2011 might, however, still be too optimistic and it might be a year later - but we will see," said Streit.

He pointed out that the government now also wants to broaden the focus of a second pillar assessment it would have been required to do next year - as part of the debate on future conversion rate developments - to include further structural reforms of the second pillar in the future.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

 

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