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Corruption trial for Swiss BVK's former asset management head set for July

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  • Corruption trial for Swiss BVK's former asset management head set for July

SWITZERLAND - The first trial in the alleged corruption scandal involving the former head of asset management at the civil servants' pension fund of Zurich (BVK) is set for July, as the scheme struggles to make up for past losses.

In October last year, the Swiss public prosecutor filed charges against Daniel Gloor and several of his business partners for alleged bribery and corruption.  

The first trial against Gloor and three of his former business partners will start on 11 July.

Two other former business partners face trial in mid-September, a spokesperson for the Zurich public prosecutor confirmed to IPE.

A parliamentary commission investigating the charges is expected to file its report this summer.

Meanwhile, the CHF21bn (€17.4bn) fund has published its 2011 annual report with a performance of -0.7%, which is slightly below its own benchmark at -0.5% and the market average at 0%. 

Around 28% of the BVK's portfolio is invested in equities, 85% of which is in index funds.

Twenty-one percent is in bonds, mostly domestic, while another 21% has been allocated to real estate, with a large domestic direct share.

The funding level dropped from 86.5% to 83.4%, confirming preliminary calculations published in February.

Currently, the Swiss parliament and government are deliberating a CHF2bn cash injection for the fund, which is to be released from state control in 2014.

In a press release, the committee of towns and municipalities in Switzerland voiced its support for the cash injection, arguing that it was the only way the BVK could reach a full funding status "within a reasonable timeframe".

It also recommended using the national bank's gold reserves for this purpose, but under strict conditions.

First, it said, the money should only benefit those municipalities within the BVK that have signed an agreement to stay with the civil servants' fund for at least another year.

Several towns and municipalities have said they are considering leaving the ailing fund, which the committee fears would alter the fund's demographic structure significantly.

A spokesman at the municipality of Wangen-Brüttisellen in the canton of Zurich confirmed to IPE that the town council was questioning whether remaining in the BVK could be "justified financially and over the long term".

The towns and municipalities' committee has also called for additional contributions, as well as cuts in the conversion rate and the interest rate used on active members' assets.

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