SWITZERLAND - The Swiss government has decided to grant the ailing Swiss federal railways (SBB) Pensionskasse CHF1.148bn (€784.5m) in aid if, in return, the fund drops all demands for a state guarantee on full funding.

The CHF11.9bn fund was only 84.4% funded at the end of last year, and therefore short of CHF2.2bn in assets to reach full funding, the finance ministry said in a statement.

"The SBB and the pension fund members will be bearing the majority of the costs for the recovery of the Pensionskasse," the ministry added.

The railway company itself will pay CHF938m into the fund and members face various changes including an increase in both the retirement age and in contributions. (See earlier IPE story: Swiss rail fund recovery go-ahead under new chief) 

"With the recovery measures and the federal aid of CHF1.148bn, the chances that the PK SBB will reach a 100% funding level by 2019 are, after all, at 74%," the ministry argued, citing government-commissioned expertise.

In accepting the government money, the railway company is also renouncing demands that had been made in 2008 calling for up to CHF3bn in financial aid. It had argued the state still had a duty towards former employees who were made part of the privatised SBB in 1999.

But higher government payments to the SBB caused uproar among other formerly state-owned Swiss operation or those working in close cooperation with state businesses, including transport Pensionskasse Ascoop which has begun to demand similar financial aid. (See earlier IPE story: Resistance against SBB financial aid)

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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