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Swiss pensions architect quits board after questions

SWITZERLAND - Professor Carl Helbling, one of the architects of Switzerland's corporate pension system, has abandoned his board seat at a Swiss pension fund following questions about his involvement in the attempted sale of a fund affiliation.

The CHF2bn (€1.2bn) Gemini pension fund announced late yesterday Helbling had quit as its supervisory board chairman.

Helbling's resignation follows news last month he and Oskar Leutwyler co-owned an affiliate to the pension fund called Gemini Personalvorsorge. The situation was seen as unusual in Switzerland as it meant they, instead of the fund, received fees for signing deals with companies who provide services to the fund.

That anomaly has now been removed with Helbling's resignation and an announcement by the fund stating it is acquiring Gemini Personalvorsorge from the professor and Leutwyler for CHF380,000.

"This will mean that the fees accumulated from insurance companies will be channelled directly to the fund's beneficiaries," Gemini said in a statement yesterday.

As owners of Gemini Personalvorsorge, Helbling and Leutwyler acquired financial services for Gemini, including a reinsurance contract with Swiss Life.

But concerns about the status of the affiliate emerged after Leutwyler, who was also managing director at Swisscanto until he was fired by the firm last month, approached the asset manager with an offer to sell their company to it.

To Leutwyler and Helbling, approaching Swisscanto did not appear to be of particular concern as Swisscanto has managed Gemini's assets and has handled customer services for the fund since 2005.

But Swisscanto last month rejected their offer after discovering Gemini Personalvorsorge was tantamount to a shell company.

"When we looked at the firm, we realised immediately that it was in no way in compliance with (Swiss) corporate pension laws. The fact was the firm did nothing," Swisscanto spokesman Beat Amstutz said.

Swisscanto also alleges Gemini Personalvorsorge was not transferring CHF1m in fees it had accumulated - for example from Swiss Life - to beneficiaries of the Gemini fund.

"We asked the two gentlemen to correct this problem but they refused, so this was another reason why we quickly disassociated ourselves from the offer," Amstutz told IPE.

Swisscanto fired Leutwyler as managing director with immediate effect on May 16 and then asked Switzerland's BSV, the federal body overseeing corporate pensions, to investigate Gemini Personalvorsorge.

The BSV has now stated it will issue a full report on the failed sale of Gemini Personalvorsorge to Swisscanto at a later date.

"We can say at this point, however, that the pension assets for Gemini's insured are in no way endangered," the federal body added.

In separate news, the IMF has welcomed the Swiss government's recent decision to create a national regulator to assist the cantons in supervision of the second pillar.

But the IMF also said "there would be more benefits from a centralised approach to supervision, particularly regarding consolidating human resources, financial knowledge as well as uniform supervision and enforcement".

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