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IPE special report May 2018

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Over-regulation 'crushing' trustees, Swiss pension industry warns

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The Swiss pensions industry has rejected a recent call for the OAK, the country’s regulator, to introduce new benchmarks and binding guidelines, saying that participants could do more to work together to reduce over-regulation.

Speaking at the pension conference Fachmesse 2. Säule in Zurich, Pierre Triponez, director at the OAK, said: “We can all do our share in ensuring regulation is less complex.”

He called on audience members, mostly were pension fund delegates, to “help by being transparent and ensuring there are no new scandals – otherwise, the politicians will ask for new rules”.

Fear of overregulation and its impact on members of trustee boards, or Stiftungsräte, was debated on various panels at the conference, hosted biannually by Swiss publishing group VPS.

And while Zurich’s top supervisor, Roger Tischhauser, recently called on the OAK to introduce new benchmarks and binding guidelines, the industry itself believes it can do with a little less regulation.

Patrick Zahno, chartered accountant at OBT and a member of two trustee boards, said he would like to see a commitment to “less regulation” as part of the Altersvorsorge 2020 reform package.

Sergio Campigotto, board member at the Migros Pensionskasse and a trustee at the collective investment foundation (Anlagestiftung) Testina, agreed there was “a danger of over-administration, which is limiting room for manoeuvering”.

Matthias Kuert Killer, head of social politics at the Swiss federation of workers’ associations Travail Suisse, called on regulators not to “burden trustees with more and more responsibility” while failing to take into account the information gap they have, compared with the pension fund experts consulting them.

But René Steffen, pension fund consultant at the collective scheme PREVAS, said he was convinced trustees did not have to “know everything” – “they just have to ask the right questions”.

And out of those, there are sometimes too few who would like trustees to be a “bit more persistent and ask more questions” when external service providers are presenting solutions, according to Roland Schmid, chief executive at Swiss Life Pensions Services.

None of the industry representatives wanted to abandon the system of having both employers and employees send lay trustees to the boards of pension funds.

“Trustee boards can continue to operate as they do,” Campigotto said, “but people have to become more aware of what they are getting themselves into.”

And trustees, he added, need to be given the time to prepare for meetings and decisions.

Schmid pointed out that there were currently more than 500 different legal paragraphs concerning pension funds, and that trustees had to think about future problems and decide what to do themselves and what to outsource.

Steffen stressed the importance of having lay trustees on boards, as it “creates trust” when employees know at least one member in a Stiftungsrat personally.

“At the moment,” he said, “this is still reality, but, with the consolidation of pension funds and the trend towards more large collective schemes, this reality is disappearing.”

For more on consolidation in the Swiss second pillar, see the June edition of IPE magazine

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