In March 2010, the two chambers of the Swiss parliament approved the structural reform of occupational pensions (BVG). The revised legal provisions will come into effect in three stages. The amendments in favor of older employees (1st stage) took effect in January 2011. The other reforms have yet to be implemented.
Following heated political debate, the Swiss Federal Council adopted the ordinances relating to the structural reform of the BVG in June 2011. The provisions concerning transparency and governance (2nd stage) will come into effect on August 1, 2011. These measures are geared toward obliging pension funds to increase their transparency and improve their asset management. Specific requirements with regard to asset managers’ integrity and loyalty are being made for the first time and significant legal transactions with related parties will have to be audited for market conformity. The pension funds have to make the requisite changes until the end of 2012.
With the enactment of the provisions on the supervisory structure on January 1, 2012 (3rd stage), the supervision of pension funds at federal level will be restructured and clearly separated from direct supervision, which will now be performed by the cantons. The aim of this measure is to strengthen supervision of the 2nd pillar and to coordinate it more effectively. At present, supervision is being defined in detail at the level of the ordinances. Powers will be transferred to the cantons over a three-year transitional period between now and the end of 2014.
- Implementation of the more stringent provisions on loyalty and integrity and ensuring ongoing compliance therewith
- Review of legal transactions with related parties
- Careful selection of officers and avoidance of potential conflicts of interest (review of the current situation)
- Ensuring that there is an internal control system in place that is adequate for the size and complexity of the pension fund
- Review of the disclosure of administration and asset management costs
- Providing support with internal organization and structuring the regulations
- Drawing up organizational and investment regulations
- Providing support with introducing and maintaining an internal control system
- Training members of pension fund boards on selected issues