SWITZERLAND – Versicherungskasse Zurich, the 10.1 billion Swiss franc (6.8 billion euro) Zurich civil service pension fund, has revealed its administration and asset management costs for 2003.

It has also revealed that its average costs are far below those charged by the Sammelstiftungen collective schemes run by insurance companies.

Administration costs were 7.5 million Swiss francs (five million euros). Total costs for asset management were 18 million francs (12.25 million euros) – or less then 0.2% of all assets. The fund made the figures known on its web site.

Half of this amount, or nine million francs (six million euros), was paid to 25 external money managers. The other half was spent on global custody and other services.

According to the fund, the costs correspond to 180 francs per contributing member and 240 francs per pensioner.

VZ’s costs are below the average costs, around 500 francs, charged by the Sammelstiftungen.

These collective schemes have been heavily criticised for high costs and lack of transparency because administration costs have never been published. They are usually a hidden part of insurance premiums paid by members.

According to the insurance companies which run the Sammelstiftungen for smaller companies, charged fees for administration are still not cost covering and may rise further. The supervising government agency of the Sammelstiftungen, the Bundesamt fur Privatversicherungen, is to scrutinize costs more closely.

Pension schemes and Sammelstiftungen have been required to publish administration costs by law. But the Sammelstiftungen as well as many pension schemes still find it difficult to find out true administration costs.

The law about transparency is going to be revised. There is an agreement that more transparency is needed but details are still not outlined.

Topics