LIECHTENSTEIN – The 41 pension funds in the Principality of Liechtenstein took in CHF208m (€132m) worth of contributions in 2004, bringing their total assets to CHF2.8bn, according to an article in a local newspaper.
Writing in the ‘Liechtensteiner Vaterland’, industry expert Bruno Matt estimated that the pension funds’ assets would have further increased to CHF3bn (€1.9bn) by the end of 2005.
Since 1989, corporate pensions have been obligatory in Liechtenstein, a tiny country between Switzerland and Austria. The Principality’s 41 pension funds insure around 30,000 employees. When these employees change jobs, they have the right to transfer their pension to the new employer.
Matt said that of the 41 schemes, 25 were tied to employers while the rest were public schemes and other broader vehicles. According to him, 24 pension funds in Liechtenstein were overfunded, while six were underfunded.
Five of the funds – all of which are open schemes launched by Swiss life insurers – were currently in liquidation, he said.
Moreover, Matt noted that the pension funds for Liechtenstein’s three biggest employers – which insure 15% of the workforce – were actually based in Switzerland and thus overseen by the Swiss regulator.
“However, there is an agreement with Swiss authorities whereby these funds also do their reporting in Liechtenstein,” he added.
Turning to the outlook, Matt said that while there would be consolidation among Liechtenstein’s 41 schemes, “it is to be expected that the number of insurers and pension assets will continue to dramatically increase”.
Citing a recent study from the University of St. Gallen, Matt also said that amid implementation of the EU pension fund directive, Liechtenstein could emerge “as an attractive place for corporate pension plans”.