SWITZERLAND – The deficit-hit €8.7bn Swiss Railway pension fund, Pensionskasse SBB, is considering borrowing CHF1bn (€639m) to plug part of its deficit.
The proposal has been launched by the SBB’s chief executive Benedikt Weibel.
The money should help cover pension liabilities for the fund’s approximately 27,000 active members, spokesman Alessandro Malfanti told IPE.
In 2004 the fund’s liabilities for both active and passive members was around CHF2.3bn (€1.49bn).
Malfanti explained that Weibel’s proposal is being considered by the scheme - but added it was difficult to give a deadline for a decision.
It also remains to be seen whether SBB should turn to the treasury or the financial markets for the loan, although Weibel is keen on the latter option.
The SBB scheme, one of the biggest in the country, was funded in 1999 as an entity independent of SBB, with start-up money from the government.
The sum provided was enough for the funding level to be 100% but did not allow for reserves.
The funding ratio has since dropped to 83.4%, in spite of a “restructuring contribution” that both sponsor and members have paid since July 2003.
Members and sponsors pay the equivalent of 1.5% of monthly salaries as a restructuring fee, which brings Pensionskasse SBB’s coffers a total of CHF50m.
The Swiss Federal Council last April set up a working group to consider the financial woes of SBB, public employee fund Publica, the pension fund of the post service.
Finance ministry spokesman Dieter Leutwyler said the ministry was waiting for the upshot of the group’s studies, expected by the end of the summer.
The ministry is not likely to consider a loan to the SBB for the time being, he said.