SWITZERLAND - The underfunded Swiss federal railways pension scheme SBB will now not implement proposals for a restructuring it had announced earlier.

The pension scheme said in a notification to members posted on its website it had decided to abandon the plans which were due to be introduced from January next year, following a review of its financial position on September 17.

SBB has therefore also abandoned the earlier scheduled additional contributions that would have been necessary for the restructuring, despite the fund's continued dire financial position.

SBB's governing board said it now wants to wait for the outcome of the government's negotiations of possible financial aid, scheduled to be presented in June next year.

The Swiss government's negotiations on possible options for financial aid for the SBB Pensionskasse - ranging from no subsidy to the full CHF3bn (€1.94bn) support - are open for public discussions until early next month.

In July this year, the Swiss economic federation "economiesuisse" as well as the conservative opposition party SVP rejected plans to further subsidise the SBB scheme.

SBB-Pensionskasse had a cover ratio of 86.3% at the end of June, and admitted in the notification yesterday its funding level had still not recovered - "the cover ratio is still clearly under 90%," said the fund.

Pension fund director Rudolf Stampfli was not available for comment today while his colleague Erwin Schwarb, the president of the fund's governing board, could not be reached.

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