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Swiss government rejects plea to back Swiss cantons in pensions dispute

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The Swiss government has re-affirmed its intention to draft legislation that would back the position of the federal supervisory authority for occupational pensions in a dispute with cantons over the governance of regional supervisory authorities.

The federal council laid out its plan earlier this month in response to a request from a member of parliament, Daniel Fässler, a member of the Christian Democratic People’s Party.

Fässler called on the government to clarify what responsibilities the law grants the federal supervisory authority for occupational pensions – the Oberaufsichtskommission (OAK), or Commission de haute surveillance (CHS).

The backdrop to this is a dispute over whether the Swiss cantons should be allowed to have representatives from their governments on the boards of regional supervisory authorities, as is currently the case.

The cantons are defending this organisation, arguing that it has never posed a problem and that they comply with the law.

The OAK is against this practice, saying it is incompatible with the legal requirement that supervisory authorities be independent.

“The OAK has communicated this viewpoint to the supervisory authorities several times, but they are sticking with their organisation,” an OAK spokesman told IPE.

“That is why the federal council will, by the end of this year, consult on draft legislation that will include a proposal to strengthen the independence of the occupational pension supervisory authorities.” 

In its response to the request from the member of parliament, the federal council said it was well aware of the discussions around the independence of the cantonal and regional supervisory bodies and that it previously found this could be impeded if cantonal government officials were members of these bodies.

Conflicts of interest are more likely to arise in relation to supervision of public sector pension providers, it added.

“The federal council,” it said, “will therefore by the end of this year consult on a bill that, in addition to a draft law to modernise first-pillar supervision, will include a proposal to strengthen the independence of the occupational pension supervisory authorities.” 

The statement confirmed the government’s previously announced plans and the related timetable – it has commissioned the interior ministry to draw up a reform plan and gave it until the end of this year to come up with its proposal.

Dominique Favre, director at As-So, the supervisory authority for western Switzerland, told IPE the cantons were “angry” about the government’s plan to change the law, which they see as a step towards centralisation.

“If you want the cantons to no longer have a say, then you need a centralised system, like FINMA, and everything would have to be done in Bern, and the federal administration would manage occupational pension provision,” he said.

“But, if they wanted a regional system, it’s normal that the local, regional or cantonal authorities would participate. It’s a fight against the centralisation of supervision.”

FINMA is the Swiss financial markets supervisory authority; in contrast to occupational pensions, the supervision of banks and insurers is centralised at the federal level.  

The dispute between the OAK and the cantons has its origins in a 2012 reform of the Swiss supervisory system for occupational pensions, which led to the creation of the OAK and also provided for the merger of the mostly cantonal supervisory authorities to form regional supervisory bodies.

The consolidation had been underway before this, however.

Today, there are three regional occupational pension supervisors in Switzerland, for the west, central and the east.

Some cantons have continued to organise supervision on a cantonal level, eschewing regional co-operation.

The three regional bodies have boards that comprise representatives from the cantonal governments.

The board of As-So, the supervisory authority for western Switzerland, for example, is made up of one representative from each of the four cantons it covers: Waadt (Vaud), Wallis (Valais), Neuenburg (Neuchâtel) and Jura.

Fässler, whose request the federal council rejected earlier this month, is in the cantonal government of Appenzell Innerrhoden and is the vice-president of the board of the supervisory authority for eastern Switzerland – precisely the type of situation the OAK is against.

The OAK has no legal right to influence the composition of a supervisory authority’s board, its spokesman told IPE.

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