SWITZERLAND - While close to all Swiss pension funds are complying with the law and have both worker and employer representatives on the board, the level of board member knowledge differs greatly, according to a study commissioned by the government and published this summer.

The first revision of the 1985 BVG law on supplementary pensions funds requiremes an equal number of employer and employee representatives on the board of a Pensionskasse was extended to multi-employer pension funds (Sammelstiftungen), including those founded by insurance companies.

To evaluate the effectiveness of the amendment, which also included new regulations on the education of these trustees and their compensation, the Swiss government  commissioned Bern based Büro Vatter political research and consultancy to assess the extent to which funds are complying with the law.

The survey, carried out in spring 2008 among 108 foundations including 26 Sammelstiftungen multi employer funds did not find any cases of non-compliance and confirmed these findings with regional supervisors on a larger scale.

Most trustees and pension experts surveyed noted the legal revision improved parity on the boards of Sammelstiftungen but it was also pointed out that compliance with the parity rule had been good in many foundations even before it was legally binding.

However, where the study finds definite potential for improvement is in the recruitment and education of trustees. Büro Vatter suggests compelling pensionf funds to outline board member training in their annual reports. It calls on pension fund associations to draw up standards for board member training.

Also, more emphasis should be put on informing board members more about their role rather than solely conveying technical knowledge.

Experts interviewed for the study said they thought the education level of lay board members remained low in those foundations for cost reasons where it already had been poor before the revision.

The study's authors also called on pension experts and workers' councils to increase interest in the dealings of pension funds through increased communication between funds and their members and by targeting interested individuals rather than waiting for them to actively apply for board membership.

Other suggested measures include asking experts and professional trustees for advice on certain issues, rotating the board presidency and limiting the power of the board president by making majority agreement compulsory.

 

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