SWITZERLAND - The multi-employer Pensionskasse for the Swiss public transport and tourism industry is setting up a new fund for those companies, which can afford to commit to reaching full-funding by 2020.

Some of the largest companies, which are currently among the 130 members of the Ascoop Pensionskasse, have initiated this split-off to create this fund set up to implement the original 15-year recovery plan.

“Those who do not want to or cannot afford to join the new fund will remain in the Ascoop Pensionskasse,” said Ascoop.

Three years ago the heavily underfunded Pensionskasse had drawn up a recovery plan which included a contribution increase by 1.5 percentage points.

However, the financial crisis had caused a major setback for the Pensionskasse leaving the funding level at 70% at year-end 2008.

According to the recovery plan, the minimum funding level for the end of 2009 is 81.23%, which means contributions would have to increase considerably to achieve that goal.

Instead the new and completely separate fund to be established in mid-2010 will be open to companies - both currently within the Ascoop as well as others - undertaking  to commit to the minimum funding levels set by the recovery plan.

Ascoop did not disclose how many companies are expected join the new fund, which will be run by a new management company, still to be formed.

Yesterday, two members had announced they are taking a different route to solve the underfunding problem and are creating their own Pensionskasse to gain more flexibility. (See earlier IPE article: Swiss pensionskasse born out of buffer concerns)

Ascoop criticised the government for not granting the Pensionskasse financial aid despite the fact that the state still holds shares in the part-privatised member companies of Ascoop.

At the fund’s annual general meeting, André Jaeggi was elected new president of the Ascoop trustee board.

The asset management expert and former financial journalist takes over from Rudolf Hedinger, CIO of Swiss Railways and Traffic Personnel Association, who had resigned as president for time pressure reasons, though he will remain on the board.

Ascoop said that hiring Jaeggi was a move to “professionalise” the trustee board.

The CHF2bn (€1.3bn) Pensionskasse also reported a negative return of 10.63% for 2008.

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