: The responsible federal offices have developed the new regulations for the most part under their own steam, and in the process have not acknowledged the importance of important sectoral bodies such as the BVG-Kommission (the Swiss Federal Commission for Occupational Pension Plans), the Swiss Association of Pension Institutions (Schweizerische Pensionskassenverband, or ASIP), the Swiss Chamber of Pension Actuaries and the Swiss Institute of Certified Accountants and Tax Consultants, or have failed to take their reservations seriously. Even the Conference of Cantonal Supervisory Authorities (Konferenz der kantonalen Aufsichtsbehörden) was not taken properly on board, as can be readily seen from the submissions received. All of this is surprising in so far as the federal authorities wanted to make sure that the new statutory and regulatory rules would be accepted and supported by the cantonal and regional supervisory authorities.
: Integrity and loyalty in responsible personnel represent an extremely sensitive area and, as such, are important aspects of today’s corporate culture. Along with properly functioning financial markets, trust and credibility are crucial elements of occupational pension provision. With unproductive auditing obligations for auditing offices in terms of disclosing vested interests or the declaration of personal pecuniary advantages, expectations are raised which cannot be fulfilled in this way. The terms of art. 35 para. 2, BVV 2, under which the auditing office is to decide on a case-by-case basis when it must look into the personal financial situation of individuals, clearly go far too far. Firstly, what we have here is management control on the part of the supreme body residing at the level of the law and, secondly, any such stipulation brings little in the way of auditing certainty, combined with an extremely unfavorable cost/benefit ratio.
: Primarily, with the new terms of the BVG and the ordinance, management responsibilities are clearly assigned to the supreme management body. Under closer scrutiny, it can be seen that the room for maneuvering available and the individual opportunities for structuring are restricted, for example in the process of adopting resolutions on improved benefits, or as a result of more extensive obligations being placed on the auditing office in terms of auditing and notification. ASIP, the Swiss Association of Pension Institutions, is talking in terms of the management body being “incapacitated.”
: Realistically targeted and practical conditions have been introduced at the legislation level that are appropriate for the task of reinforcing both the management responsibility of the supreme body and faith in occupational pension provision. However, at ordinance level it is clear that the link with reality has come adrift. Along with the general degree of over-regulation there are, in particular, conditions at ordinance level which must be rejected, as they have no legal basis – such as the auditing obligation for the internal control system. Apart from the question of legal validity, with any such approach there is also the question of whether the will of Parliament is not being subverted at the downstream administrative level.
: The new supervisory structure, with the introduction of a supreme supervisory commission and a direct supervision undertaken by the cantonal and regional supervisory authorities, generates an added value if it succeeds in simplifying supervisory activity and practice, and making these aspects more professional. This is certainly an aim to be welcomed and, in the final analysis, results in more effective supervision. However, this target must be achieved at a reasonable cost/benefit ratio. Even the cantonal supervisory authorities and the Conference of Cantonal Supervisory Authorities are speaking out against a disproportionately high degree of supreme supervision and exaggerated supreme supervision duties which, in individual cases, could result in many times the charge for direct supervision to date. At the same time, the costs of direct supervision are not factored into the calculation.
A further topic is the increasing complexity and the associated uncertainty as well as the time burden imposed on management bodies. The result of these factors is that it will become ever more difficult to recruit employee representatives to foundation boards.
: With the innovations as envisaged, the control pyramid is being skewed heavily in the direction of the auditing office. Labor unions have already warned that the changes to the regulations strengthen the position of the auditing offices excessively, and turn them into powerful players in the field of occupational pension provision. In its submission, the Swiss Institute of Certified Accountants and Tax Consultants made it clear that the indivisible management responsibility of the supreme body must not be restricted by imposing additional and unproductive auditing obligations on the auditing office. Not to be underestimated is the additional cost of auditing which would arise from the intended extension of the catalogue of duties and responsibilities, and which would result in extra costs to pension schemes. Apart from this, it should be possible for the auditing office to fulfill its statutory auditing mandate as an independent business partner of the pension scheme, and not as an extended arm of the supervisory authority. In an experimental environment of this kind, what will ultimately suffer are the relationship of trust and the open communication with the foundation board, with a detrimental effect on the efficient performance of the mandate.
It is not only the prospective pensioners who dream of this. However, in the current investment environment, the reality looks rather different. Certain pension schemes have considered reducing inbuilt system factors that drive returns, such as promised benefits and guarantees, or giving these a more flexible structure, with the aim of enabling the actively insured and at least some existing pensioners to participate in the existing opportunities and risks. The key ideas here are: switching from benefits-based to contribution-based plans, reducing conversion rates and technical interest rates, or splitting the retirement pension into a guaranteed basic pension and a variable additional pension, determined by the financial development of the pension scheme.
Interview: Andreas Hammer, Marketing & Communications