SWITZERLAND - The Swiss government has decided to come to the rescue of the ailing Federal Railways (SBB) pension fund and might contribute as much as CHF3.1bn (€1.9bn).

A bill has been drafted containing four possible scenarios to tackle the struggling fund, stretching from the government paying the full sum to granting no financial aid at all, a spokesman for the finance ministry confirmed to IPE.

However, finance minister Heinz-Rudolf Merz "told media he thinks there is no way around the state making a contribution", the spokesman said.

The CHF12bn SBB Pensionskasse currently has a deficit of CHF1.1bn but its management had warned without state aid members's wages would have to be cut by 4% to 6% over the next years. (See earlier IPE story: SBB warns wage cuts needed to fund Pensionskasse)

Negotiations on the various rescue scenarios will continue until the end of the year which means the bill will be presented to parliament in spring of next year at the earliest.

Any contribution granted to SBB might lead to demands for funding from other public pension funds, as one fund has already called for "equal treatment".

The CHF2.3bn ASCOOP pension fund for public transport workers - which excludes federal railways staff - is now 80% funded up, from 76% in 2006, having returned 3.41% over the last year.

However, the fund is a collective of several funds which were merged in 2006 and each still exist as separate entities under ASCOOP so each therefore has a different funding level.

"The relatively good return is therefore not sufficient for most of the Pensionskassen," the 15,000 member fund collective said in a statement.

ASCOOP members have raised contributions over recent years and some companies have made one-off payments to their Pensionskasse.

ASCOOP pointed out its underfunding - just like SBB's - was caused mainly by changed to the legislation for invalidity benefits in 2002 and high actuarial rates put in place by the government to keep the social contributions of public transport companies at a low level.

"Should the SBB Pensionskasse be granted state aid, ASCOOP has to be treated equally. Otherwise companies within ASCOOP would suffer unjustified competitive disadvantages," trustees of the public transport fund noted.

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