SWITZERLAND - The Swiss Social Democrats (SP) want to separate pension money from other assets within insurance companies while another left-wing politician wants pension funds to be supervised by the financial supervisory authority "Finma" in future.

The Swiss SP is now demanding changes as the referendum on the conversion rate cuts was judged by many to have been a protest against fee structures and reserve policies of insurance companies. (See earlier IPE story: Seven in 10 voted against Swiss conversion rate cut)

Under SP suggestions, insurers would no longer have access to any capital gains made from their clients' pension assets and would instead have to separate these assets from any other insurance business.

Furthermore, the SP wants unified regulations on the management of pension assets in insurance companies as well as on fee structures.

According to Peter Wirth, head of the second pillar platform "Vorsorgeforum", the move would "most likely be the end of the insurance-based 'Vollversicherungsmodell'" as it would be much harder for insurance companies to build sufficient reserves offer them.

In his newsletter, Wirth quotes figures suggesting one-fourth of Swiss pension plan members are currently in such schemes and are used by 150,000 SMEs.

Wirth said he would like to see market competition solve the problem of unjustified fees and failed reserve policies in some insurance companies.

Meanwhile, Marlies Bänzinger from the Greens has put forward a motion in parliament arguing the financial markets authority Finma should be responsible for the supervision of pension funds.

She argued the social ministry BSV, which is still the supervising body at present, does not have the financial expertise.

However, the BSV will be relieved from this duty soon anyway as supervisory reforms will create a new authority. (See earlier IPE story: Swiss pension funds to name managers under tighter disclosure)

Bänzinger has yet to clarify whether she would like to see the supervisory remits split between the new authority and the Finma in future, as her motion is set to be discussed in parliament.

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