IPE DACH Briefing: Swiss to vote on second pillar reform

The Swiss are heading to the polls on 22 September to approve or reject the reform of the second pillar pension system.

The public debate on the matter is in full swing, split into two camps: on one side the unions, against the reform, and on the other side a coalition of parties holding the majority of the seats in Parliament, backing the changes.

The transparency on costs incurred by pension funds has been at the centre of a fierce dispute between the two camps, following figures published by economist Rudolf Strahm, revealing that costs are higher than those disclosed by authorities.

Unions continued to campaign on the topic, saying that the financial industry has gained CHF67.7bn (€71.2bn) from managing second pillar assets.

The country’s pension funds association ASIP, asset management association AMAS, pension fund managers and experts strongly pushed back, believing that the front against the reform is weaponising figures on costs to steer a still sceptic public to vote against the changes in September.

Will you resign, Herr Rossini?

The director of the Federal Social Insurance Office (FSIO), Stéphane Rossini, was nudged to resign for a mistake made that overestimated expenses of the first pillar social security fund AHV, the largest of the three under managed by Compenswiss.

Rossini defended himself, but the Ministry of Internal Affairs will start an investigation to understand the cause of the error, making sure that figures in the future are reliable to keep the trust of the public and the first pillar intact.

The Swiss government has decided to increase VAT to finance the 13th month of pension – 13. AHV-Rente – instead of increasing contributions, despite a majority of stakeholders taking part in the consultation backing a plan combining higher wage contributions and higher VAT to fund the measure.

Germany

In Germany, Höchster Pensionskasse VVaG has become the first occupational pension scheme of its kind to provide pure defined contribution (DC) plans under the social partner model signed by the German Federation of Chemical Employers’ Associations (BAVC), and trade union IGBCE.

Only a handful of social partner models have started so far, with the government planning to reform the architecture of pure DC plans to try spread them among employees in small and medium-sized firms.

Separately, Geno Pensionskasse VVaG, the German corporate pension fund for the employees of cooperative organisations, has disclosed an investment in the a fund run by Amberra, the venture capital arm of the cooperative banking group (Genossenschaftlichen FinanzGruppe Volksbanken Raiffeisenbanken), a rarity in the occupational pension landscape in Germany.

Items to note

• The IPE Real Assets Infrastructure & Natural Capital Global Conference & Awards 2024 will take place in Munich on 12-13 September at the Munich Marriott Hotel.

Luigi Serenelli

IPE DACH correspondent