The Swiss government has adopted several changes to the regulation on old-age and survivors’ insurance (AHVG), and other laws also relating to occupational pensions (BVV2), to review and strengthen supervision in the country’s first and second pillar pension systems.
In the second pillar, the reviewed ordinance clarifies the definition of pensioners’ portfolios, which can be transferred from one pension scheme to another, in addition to the definition of sufficient funding.
This gives experts in the field of occupational pensions a clearer framework to oversee the transfer of pension portfolios, according to a paper published by the Federal Social Insurance Office (FSIO) explaining the new rules.
This specific rule provides a framework to fund all pension portfolios that are transferred without differentiating between smaller and larger portfolios, it added.
The data exchange between pension funds and the Central Compensation Office (ZAS) – the government’s central enforcement body for the first pillar – would become easier under the new laws.
Regarding the first pillar, the latest changes should improve the governance of compensation funds and introduce mechanisms to check IT systems.
As the number of members in compensation funds decline, the funds are required to have enough funds at their disposal. The supervisory authority defines the method to calculate the reserves necessary before liquidating a business, adjusting values to inflation, according to FSIO.
Compensation funds must also rely on robust risk and quality management mechanisms and internal controls checked by auditors, it added.
In social insurance institutions, the representatives of the cantonal government or administration must not represent the majority in the administrative commission.
With the latest changes, the responsibility to approve licences of lead auditors is transferred from the FSIO to the Federal Audit Oversight Authority (FAOA), with criteria for authorisations regulated in the Audit Supervision Ordinance.
The Federal Council delegates the supervision of regulation implementation to a federal administration supervisory authority. The designated supervisory authority is BSV.
The BSV has published recommendations on IT security and data protection for the first pillar pension system. A separate process on IT audits will be carried out in the future.
The Swiss Parliament passed the amendment to the AHVV 2 in June last year. The new rule will come into force on 1 January 2024.