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Swiss funds to get governance index

SWITZERLAND - Swiss Pensionskassen are not as bad as their reputation, according to Andreas Zingg, a researcher at the university of St. Gallen who is looking into pension fund governance.

Zingg - who working at the institute for banks and insurances at the university, headed by professor Manuel Ammann - has launched a survey of Pensionskassen to investigate various aspects of administration, decision-making and communication.

"Following several unconfirmed reports about malpractices at Swiss Pensionskassen, governance has become an issue widely discussed in the media," Zingg explained in an interview with IPE.

"Pensionskassen have come under fire although I am sure 99.9% of those managing pension fund money are doing a very good job."

He pointed out most of the board members at Pensionskassen were unpaid volunteers.

The Governance index created on the back of survey data will give pension funds an idea where they stand in comparison to other Pensionskassen, Zingg said.

Publication of the resarch results is scheduled for spring next year.

For each of the six categories covered in the survey participating funds will receive a detailed analysis on how they are doing.

"We are asking questions about set-up of the Pensionskasse, goals and objectives for the fund, investment strategy and organisation, supervision and control within the fund as well as internal and external communication," the researcher said.

"The public discussion on governance only focused on investment issues and malpractices but we want to give a broader picture of governance," he explained.

Zingg noted research in the field has been sparse in Switzerland so all available academic research has been used and the university has contacted pension funds to check whether the index would be meaningful.

"We also want to find out whether good governance leads to better performance and which strategies are making sense," he added.

He expects smaller funds to have a lower level of governance in some of the sub-categories because of their size but adds large funds have deficits in some areas as well.

Zingg is convinced the index will help funds to better assess their governance and maybe make changes.

Funds wanting to participate in the study can get information directly from Andreas Zingg at andreas.zingg@unisg.ch.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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