The decision to place Swiss pension fund Tellco Pensionskasse under administration is being viewed by industry experts as an isolated case that underlines the effectiveness of supervisory measures in restoring stable governance in multi-employer pension funds.
The Swiss supervisory authority is likely to have intervened due to disputes over competencies within the board of trustees, consultant Werner C. Hug told IPE.
The move by the Zentralschweizer BVG und Stiftungsaufsicht (ZBSA), which last week transferred administration of Tellco Pensionskasse to WTW, should not be taken as evidence that Swiss multi-employer pension funds are failing to operate in accordance with the law, he said.
“It would be wrong to generalise from a single case. That is the task of the supervisory authority, and it is clearly functioning well,” Hug added.
He also pointed to the complex structure surrounding Tellco, where the board of trustees appears to have delegated key functions and may no longer hold sole decision-making authority.
Nico Fiore, managing director of inter-pension, which represents Swiss multi-employer pension funds, agreed that such schemes are structurally complex, bringing together large numbers of employers and diverse interests.
“However, it is precisely this structure that enables many small and medium-sized firms to access professional occupational pension schemes in the first place,” he said.
Fiore noted that clear supervisory instruments exist to restore proper management where issues arise in individual cases.
“Such interventions are rare, exceptional measures. The fact that they are provided for and occasionally applied demonstrates that the system has functioning safeguards,” he added.
The occupational pension supervisor continues to closely monitor the growth of multi-employer schemes, which now serve around three-quarters of active members, while also facing potential conflicts of interest.
According to Fiore, the sector has evolved significantly in recent years and strengthened governance requirements, including on transparency, disclosure of conflicts of interest and decision-making structures.
Missing link with members
Governance is set out in the occupational pensions law BVG, which requires equal representation of employees and employers on the highest governing body of pension funds.
Members elect their representatives directly or via delegates. Where this is not feasible due to the structure of a scheme, particularly in multi-employer arrangements, supervisory authorities may permit alternative forms of representation.
The Swiss Federation of Trade Unions (SGB USS) has warned that, in some cases, board members no longer maintain a direct link with scheme members.
Peter Hofmann, former president of Tellco Pensionskasse and employee representative prior to the intervention, lacked a connection with members and employees, the union said in a statement.
As a result, employee oversight at funds such as Tellco does not function adequately, according to the union.
“The Tellco case demonstrates once again the need to reinforce supervision in the second pillar,” SGB USS said.
