UBS will assess the possibility of merging its pension fund with Credit Suisse Pensionskasse following the emergency takeover of the bank in March.
Credit Suisse Pensionskassen said on its website that the move towards the merger of the banks’ pension schemes would be “examined in the future”, a step forward from the initial intent of keeping the schemes as independent entities within the new UBS bank.
Earlier this month, Credit Suisse’s Pensionskasse pointed to a “possible liquidation” of the pension fund for the first time, according to financial news portal tippinpoint. The scheme would continue to exist for the time being, and all of Credit Suisse’s employees would continue to be members, the scheme announced on its website.
Employee contributions will continue to flow to the pension fund as long as an employment relationship exists, deducted automatically on a monthly basis, and benefits remain unchanged, it added.
Credit Suisse Pensionskasse has a funding ratio of 124.2%, CHF17bn assets under management, and over 16,000 members, providing benefits to over 10,000 pensioners, it said.
Consultants told IPE the merger of the two pension funds will face a series of issues including funding ratios, benefit levels, and investment strategies, protecting the rights of all beneficiaries.
One expert with knowledge of Credit Suisse Pensionskasse told IPE that a sticking point to close the merger of the schemes are 1e plans, which give the possibility for staff with an annual salary of more than CHF129,060 (as of 2022) to choose among different strategies, and offered by Credit Suisse’s pension fund but not by UBS.
In the event of a merger, either UBS must switch to the 1e plan, or the Pensionskasse 2 will have to close, the expert said.
1e plans are managed by the Pensionskasse 2, a Credit Suisse foundation with assets under management of CHF836m and 9,.711 active members as of the end of last year.
Since the beginning of last year, members in the Pensionskasse 2 can invest in two new funds, adding to the six existing Mixta BVG funds, according to the scheme’s latest financial statement.