SWITZERLAND - Giving individuals the option to choose their pension fund freely would "destroy the solidarity in the system", participants at a panel discussion in Zurich have argued.
Swiss pensionskassen expressed strong resistance at the Swiss retirement provision fair this week to suggestions there should be an end to links between pension funds and employers, in order to allow greater consolidation.
The Swiss regulator says there are currently 2,700 pensionskassen, but some of these have only the minimum amount of 200 members because there remains a strong tradition of employers setting up pension funds for their staff.
"Free choice of pension funds is complete nonsense," said Hans-Ulrich Stauffer, member of the board at the multi-employer ensionskasse Abendrot.
Roland Müller, from the employer federation, also added: "We would end up with some funds which only have invalids and retired people in them and no active member would join them. It would cost a lot of money for every pension fund to try and win members in an open market."
However, Beat Kappeler, social scientist who supported the finance ministry's suggestion for free pension fund choice in the debate, noted solidarity is not part of the second pillar at present either.
"In case of underfunding, retired pension fund members cannot be included in contributions to the fund via pension cuts."
This is a situation Christoph Ryter, head of the pension fund association ASIP would like to see changed.
"We want better risk-sharing between all stakeholders as this would lead to a more efficient system and people would get better value for their money," said Ryter.
Kappeler said more efficiency would come with fewer pension funds.
Indeed, some pensionskassen have joined multi-employer funds or created one by joining with a few smaller funds.
However, as Martin Bäumle, member of parliament and member of the board of a small pension fund, pointed out, "experiences of joining small pension funds were not always good".
Problems have arisen as a result of different funding levels or administration merger difficulties.
Ryter also confirmed to IPE the ideal of an autonomous pension fund is still strong, where several funds would only outsource certain services such as asset management.