Swiss pension fund associations, insurance companies and banks are rallying together in a bid to thwart government taxation plans for second pillar pension schemes. At a joint-action press conference in Berne at the end of last month, clear opposition to government tinkering with pension contributions was declared.

The main focus of the organisations' anger is a proposal to impose a tax levy on irregular pension plan contributions made by companies in the event of good or bad performance years.

Plans to set a ceiling on the amount of assets an employee must bring to a new scheme in the event of a change in employment, were also denounced as 'heavy-handed and severe'.

Peter Wirth, managing director of Switzerland's second pillar forum (Versorgeforum), says: It is government nonsense to tax employer contributions in this manner, merely be-cause they themselves are experiencing fiscal deficits at the moment and believe they can ride roughshod over us with complicated back-door reforms. What will happen is that companies will stop contributing altogether."

On the mobile employee side, Wirth believes the government's suggested upper limit on pension plan asset transfers could rule out the possibility to move schemes for anyone earning below SFr100,000 ($72,000).

"No-one should be denied the opportunity to buy into a new pension plan, and this is a government bludgeon under the guise of reform to a system which a minority of participants abuse by placing cash in funds to avoid taxation," Wirth declares.

The Swiss groups are hoping to emulate their lobbying success against previous government plans to lower tax free pension contribution levels to around SFr280,000, which have now been dropped.

Wirth believes they have a 50% chance of stopping the latest plans.

Discussions are presently taking place amongst the taxation committee of the Swiss parliament, with draft legislation expected to go before the second senate chamber in March.

Jean Pierre Landry of OFSA, The Swiss Federal Office of Social Assurance, says: "This issue has become very politically charged, especially with original contribution tax plans being vetoed. I expect the Swiss parliament to throw their weight behind these proposals, bearing in mind their desire to introduce some form of new fiscal revenue. But no-one is sure whether the senate will support them next year." Hugh Wheelan"