SWITZERLAND - The global financial crisis has aggravated the financial situation of the Pensionskasse for SBB, the Swiss federal railways operator, so much it is now asking for state aid or it will have to cut wages by up to 6%.

The CHF12bn (€7.6bn) SBB Pensionskasse returned 1.08% in 2007, outperforming its benchmark by 0.33 percentage points but well below the 2006 return of 5.62%.

This performance drop led to an increase in the level of underfunding from 5.5% to 7.6%, leaving a pension gap of CHF 1.1bn, and despite a one-off payment of CHF1.493bn by the company.

"There is urgent need for action," the SBB pointed out in its annual report.

"Without a funding solution, the Pensionskasssen trustees would have to opt for further cuts which might mean SBB staff would have to pay CHF1.5bn-CHF2bn over the next 10 years, amounting to effective wage cuts of 4.5% or 6%," it was added in the report.

SBB also pointed out pensions would have to be cut , which would be an especially hard blow for 30,000 pensioners who have not been granted an increase in pensions income since 2004.

"For those people, the SBB and its pensionfund members, a quick decision in parliament on the subject is essential," the company noted.

The Swiss parliament has commissioned a study into the possibility of granting financial aid from the government for the SBB.  (See earlier IPE story: Federal support still uncertain at SBB)

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