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Swiss put insurers' second-pillar admin costs under microscope

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  • Swiss put insurers' second-pillar admin costs under microscope

SWITZERLAND – The Swiss government, aiming to improve transparency in the second-pillar system, has commissioned a study into the administration costs of life insurers offering pension products.

The study will be the third in a series commissioned by the government since it unveiled 'Altersvorsorge 2020', its reform proposals for the pension system.

The previous studies focused on cross-financing between active and retired members in Pensionskassen, and long-term return expectations.

Now the government wants in-depth data on the administration costs of life insurers offering pension funds alongside autonomous Pensionskassen in the second pillar.

In its latest tender, the government said its aim was to increase transparency in the second pillar – particularly with respect to insurance companies.

A lack of transparency in the contracts of these providers was part of a protest referendum in 2010, together with a vote against another cut in the conversion rate.

The vast majority of the Swiss electorate rejected the latter, but many industry representatives believe the vote was, in fact, a de facto rejection of insurers' track record on admin costs.

The government noted in its tender that transparency was one of the key issues for building trust in the second pillar.

It added that the study results would supplement previous research into asset management costs in the second pillar.

The study is to be conducted in October, with interim results to be published by November and final results expected by the end of next year.

Tender offers will be accepted until 16 September. 

The tender notice can be found here (in German).

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