IMF wants stronger Swiss 2nd-pillar supervision

SWITZERLAND – The IMF says there is a “real need” for stronger supervision in the Swiss second pillar – and has called for a “level playing field” between pension funds and life insurers.

There is “a real need to strengthen supervision, especially for the second pillar, and improve accounting standards,” the IMF said.

“Regulations should be introduced that provide for a level playing field between pension funds and life insurers and that eliminate regulatory arbitrage in the second pillar.”

“Strains in the pension and insurance sectors have subsided but some weaknesses remain,” the fund said in report about Switzerland.

“Conditions in the industry have stabilized with the rebound in equity prices and the decrease in the minimum guaranteed interest rate.” It said it would “welcome a rule-based mechanism in setting the minimum rate”.

Earlier this week the upper house of the Swiss parliament decided that pension funds can ignore the minimum interest rate guarantee of 2.25% for a maximum of five years.

The Swiss finance ministry added: “The IMF raised the issue of the need for more accurate recording by the authorities of pension fund operating results.”

Overall, the Swiss finance ministry noted that the IMF was satisfied with the “core aspects” of Switzerland's economic policy.

It said: “The International Monetary Fund is of the opinion that the Swiss economy is supported by an appropriate economic policy. Signs of an upturn are clearly visible.”

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