SWITZERLAND - Investment consultant Aon Chuard has denied it is partly to blame for a more than CHF1bn (€646m) deficit at Berne teachers pension fund BLVK.
Last week, a Swiss parliamentary committee investigating the CHF4.5bn scheme released a report saying the deficit was the result of a “risky investment strategy” adopted by the fund in 1999/2000 – shortly before the equity bubble burst.
Advising on BLVK's strategic asset allocation in 1998, the forerunner to Aon Chuard suggested that the pension fund invest up to 42% in equities.
The committee’s report placed most of the blame on Hans-Peter Sieber, BLVK’s director at the time of the decision, as well as supervisors of the pension fund. It noted that despite heavy losses at the fund caused by the equity bubble’s burst, Sieber was not removed.
The report also said Aon Chuard, part of the Aon network and BLVK’s investment consultant in the late 1990s, shared some of the blame, as it encouraged the fund to adopt the risky investment strategy. According to a Swiss news report, this finding has led the committee to recommend that BLVK take legal action against Aon Chuard.
Aon Chuard has angrily dismissed the charge, noting that it had acted merely as an advisor and was thus absolved of responsibility for investment decisions taken by the BLVK.
“Our consultants must only abide by the rules and regulations for our profession,” the firm said in a statement.
“This means they cannot be made responsible for decisions regarding the investment strategy. That lies entirely with the client.”
Aon Chuard also said it was “outrageous” that the parliamentary committee decided to judge its behaviour “according to political instead of professional criteria”.
Ernst Rätzer, chief executive of the consultant, could not be reached for further comment, including how Aon Chuard would respond to legal action from the BLVK.
BLVK declined to comment to IPE on the committee’s findings.
BLVK provides a pension to teachers and other educational staff in and around the Swiss capital. It has around 15,250 members and 5,350 pensioners.
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