BPK recovery goes back to drawing board
SWITZERLAND - The canton of Bern has rejected proposals for an increase in contributions to the Bernische pensionskasse (BPK).
The CHF7.5bn (€5bn) pensionskasse for civil servants of the canton reported it suffered a further -2.3% return for the first quarter of 2009 on top of the -13.1% for 2008.
This brought the funding level down to under 85% from the 100% held in 2007. (See earlier IPE story: Underfunded Swiss funds soldier on)
As part of its recovery plan, the administrative committee of the pensionskasse had suggested contribution be increased from both employees and employers.
However, the government of the canton, which has to approve the measures, said it will not agree to contribution raises, nor will it make any direct payments to the BPK to help improve the funding level.
The government cited the general economic situation as well as the canton's financial situation in its rejection.
The BPK now has to go back to the drawing board to come up with a new proposal for recovery measures, and these are expected to be finalised by the end of autumn. (See earlier IPE article: CHF350m needed as special payment from Swiss employers)
The measures originally suggested that indexation payments be stopped for existing pensions, while a contribution increase of 2.2% to be shared among employees (0.4%) and employers (1.8%) along with a limited recovery contribution of 3.5% of the current contribution level, which again was to be split between employees (1.4%) and employers (1.8%).
No changes to the investment strategy have been unveiled.
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