Swiss pension experts have warned against an expansion of supervisory powers and creeping over-regulation following a government review of past reforms.
A report published by the Swiss government, and drafted with input from industry experts, assesses the structural reform implemented in 2011 and 2012 to strengthen supervision, governance and transparency in the country’s second pillar pension system.
While the review concludes that reforms have had a broadly positive impact, it identifies areas for improvement, including greater harmonisation of supervisory practices, enhanced directives from occupational pension supervisor OAK BV, and improved expertise among decision-makers overseeing pension plans and investments.
Benita von Lindeiner, partner at consultancy c-alm, described the analysis as “an important step to assess the status quo and identify areas of action to strengthen the second pillar”.
She noted improved cooperation between regional supervisory authorities and OAK BV, as well as progress in standardising supervisory activities, “not least through the merger of the BVS (supervisory authority in Zurich) and the Eastern Switzerland supervisory authority” on 1 January.
However, c-alm remains critical of further standardisation if it risks constraining pension fund governance.
“It is important that the discretionary powers of the board of trustees are not unduly restricted and that the different structures and risk capacities of the pension funds continue to be taken into account,” von Lindeiner said.
She added that this flexibility ensures investment strategies remain aligned with risk capacity and supports overall system efficiency and diversification.
On governance, the report calls for adjustments in areas such as separation of powers, transparency and competition. Von Lindeiner cautioned, however, that any changes “must be proportionate and should clearly consider regulatory efficiency in a targeted manner”.
OAK BV is currently developing a directive on transactions with third parties aimed at improving transparency and managing conflicts of interest, particularly among multi-employer pension funds.
“We see above all [multi-employer pension funds] Sammel- und Gemeinschaftseinrichtungen as having a particular responsibility to ensure greater transparency and competition, for example, through meaningful governance reporting,” von Lindeiner noted.
C-alm also raised concerns about proposals to disclose implicit transaction costs, arguing that assumptions required could undermine comparability and reduce transparency, especially as most funds already report net investment returns.
Nico Fiore, managing director at inter-pension (the organisation representing the interests of Swiss multi-employer pension schemes), agreed that earlier reforms strengthened governance and oversight, but warned against unintended consequences from further regulation.
“I view critically the tendency to strengthen federal oversight at the expense of the cantonal, direct supervisory authorities. Our conclusion is therefore: harmonisation yes – centralisation no,” he explained.
Fiore also questioned proposals to strengthen OAK BV’s enforcement powers.
“If directives meet criticism in practice, the first point of focus should be their quality and practicality – not their enforceability. We are convinced that better regulation results from more dialogue before directives are issued – not from stronger sanctions afterwards,” he said.
OAK BV acknowledged “the need for legal clarification and further development in various areas” and said it would analyse the report in depth while continuing discussions with stakeholders, including regional and cantonal supervisory authorities.
