SWITZERLAND – Walter Kohler, managing director of Pensionskasse Post, a CHF12.2bn (€7.8bn) fund for Swiss postal employees, has quit his post with immediate effect.

Pensionskasse Post said Kohler’s resignation was prompted by “differences on future strategy” between him and the fund’s other executives. These executives include Yves-André Jeandupeux, who is president of Pensionskasse Post’s supervisory board.

“Stewardship of the fund will, in any case, be maintained until a successor is found,” Pensionskasse Post said.

For 2005, Pensionskasse Post had a return on assets of 11.1% - in line with the industry average – and a coverage ratio of 100%, meaning that it was fully funded. Andres Haueter is head of portfolio management at the fund.

Kohler’s abrupt resignation comes at a turbulent time for the fund. Although the Swiss government privatised it in 2002, it did not, from an actuarial standpoint, fully capitalise it.

According to sources familiar with Pensionskasse Post’s situation, the Swiss government still owes it around CHF800m. They said the money would likely come from profits earned by Switzerland’s still state-owned postal service and be paid by 2009.

Meanwhile, Pensionskasse Post’s finds itself in difficult negotiations with the Swiss postal service union regarding its plan to switch to a defined contribution scheme from a defined benefit in 2008.

The sources, who spoke on condition of anonymity, said one of the union’s conditions in agreeing to the switch was the government’s payment of the CHF800m owed to the fund.

According to Pensionskasse Post’s website, the fund currently has 28.4% of its assets invested in equities, 19.8% of which are foreign. Another 44.6% in invested in bonds, 39.6% of which are denominated in Swiss francs. The fund also has 11.5% invested in real estate and 11.8% in cash plus 3.6% in alternative asset classes.

Separately, Basel’s public prosecutor has dropped a criminal investigation of the city’s finance department which was prompted by an earlier trading scandal at the pension fund for Basel’s civil servants. The prosecutor said it could find no further evidence of wrongdoing in the finance department.

The scandal erupted in 2002, when it emerged that finance personnel used part of the pension fund’s assets for their own investing. The head of Basel’s finance department, Urs Müller, resigned over the scandal.

In 2001 and 2002, Basel’s pension fund reported millions of Swiss francs in losses, owing partly to the trading scandal. At the start of 2005, it still had a funding deficit of CHF2bn.