SWITZERLAND - Ascoop, the 2.1 billion Swiss franc (1.5 billion euro) Swiss transportation sector pension fund, has confirmed it is to take legal steps against its former chief executive.

Communications officer Juerg Sigerist confirmed that the fund is taking its former chief executive Jean-Claude Dueby and former president Peter Joss to court - though he declined to disclose details of the charge.

Swiss media have repeatedly accused them of dubious business practices – involving the Canadian Investment Company Proprietary Industries (PPI). Ascoop was a major shareholder of PPI and Dueby and Joss were on its board.

The decision to start legal proceedings is based upon investigations by PricewaterhouseCoopers. Ascoops’ auditors, Ernst & Young, were not involved after one of its managers was, according to Swiss newspapers, also a member of the board of PPI. E&Y declined to comment.

Martin Oester, who took over as CEO from Dueby in June 2002, is leaving Ascoop. According to sources near the scheme he was unable to endure the public interest and pressure.

In March the scheme’s 14,500 members were told that the coverage ratio had fallen to 77%. In response, it is to increase contributions from 15% to 20% of salary. In addition employers will pay in one extra per cent of insured wages. Furthermore old age payouts will be reduced to 63% from 67.5% of final salary.

Thus Ascoop should be able to recover after 10 years if returns on assets amount to 5%. Existing payouts and previously achieved entitlements will not be reduced.

Last month the council of the Swiss canton of Valais suspended Ignace Rey, the president of the investment committee for the Valais pension fund for teachers, due to "irregularities".