Switzerland to commission survey on second-pillar costs
SWITZERLAND - Lowering administrative costs in the second pillar will be the primary aim of a Swiss government initiative that will start by commissioning a survey on the subject.
According to recent government data, administration costs in the second pillar came to approximately CHF300 (€224) per member - not counting asset management costs, which have been calculated to be around 0.2% of assets under management and currently stand at CHF550bn for the entire second pillar.
Neither does the government's figure include any costs for occupational pension provision in the companies themselves, which has led the asset management company Swisscanto to conclude in its last Pensionskassen monitor that the average of CHF300 is "most likely too low".
The Swiss government is now tendering for researchers to analyse the "most important remits and events that lead to high administrative costs" for pension funds and companies, such as the joining and leaving of members, ongoing administrative costs, divorces or invalidity.
The researchers are to check which legal requirements are the most costly with regards to distributing information and filing reports.
In their talks with companies and pension funds, they are also to determine which regulatory requirements might be deemed too costly or superfluous.
Fees for asset managers and other costs relating to investments made by a pension fund will not be covered by the research.
In the tender documentation, the Swiss social ministry said: "Increased efficiency in administrating the system would be very welcome, as Pensionskassen have reported difficulties in keeping their financial balance in the long term, not only because of the conversion rate, but also because of the financial crisis and demographic ageing.
"Further, the government has made easing the administrative burden on companies a priority to boost economic growth."
Research is to start in August, with a final report scheduled for 2011.