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Swiss court ruling over fund collapse appealed

SWITZERLAND - Authorities for the Swiss canton of Solothurn have appealed a court ruling that dismissed their lawsuit against six people connected with the 1996 collapse of the Vera/Pevos pension fund.

In April 2004, Solothurn's public prosecutor filed criminal charges against the six people, holding them responsible for the demise of the Vera/Pevos scheme. The scheme was liquidated in 1996 following a CHF200m (€123m) deficit caused by disastrous investments in local real estate.

But on December 15, an administrative court for the city of Olten threw out the lawsuit. It agreed with lawyers for the six people that because the lawsuit was not specific enough, the accused could not sufficiently defend themselves.

In response, Solothurn's public prosecutor and Christoph Degen, the liquidator for the Vera/Pevos scheme, said they had appealed the decision with Solothurn's high court.

Speaking to the local press, Degen dismissed the court's view that the lawsuit was not specific enough. "It seems to me that if the press was able to explain the lawsuit ahead of the ruling, it was clear enough," he said.

Degen also questioned the Olten court's procedures, asking, if the lawsuit's flaws were so obvious, "why did it take two and a half years for the court to point them out?"

There was no word yet from Solothurn's high court on when it would hear the appeal. The six accused include three ex-managers of the Vera/Pevos pension fund, a former supervisor for the scheme and two employees at Swiss auditor BDO Visura.

Following the collapse of the Vera/Pevos scheme - the worst ever in Switzerland -
authorities provided a bailout worth CHF73m to preserve benefits for the scheme's 2,000 insured employees.

Separately, the Swiss parliament has given final approval to a law permitting Publica, the CHF30bn pension fund for federal employees, to switch to defined contribution from defined benefit starting January 2008.

However, Swiss press reports said the law may have to pass a national referendum first before it can go into force.

Once the law does take effect, Publica will provide pension benefits according to how much is paid into the scheme by the Swiss government and employees insured by it. The law also raises the age for the maximum pension benefit to 65 from 62 currently.

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