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Swiss regulator in new year shake-up

SWITZERLAND - Daniel Stufetti, head of the Swiss Federal Bundesamt für Sozialversicherungen – the department in charge of social security and pension fund law - is to resign at the end of the year, with the organisation itself set for re-organization.

The government agency also deals with law enforcement and direct supervision of the Sammelstiftungen – the common foundations of smaller pension funds that insure roughly two thirds of Swiss employees.

The reorganization of the Bundesamt is aimed at harmonising the Swiss first and second pillar in order to better match legislation in the social security system.
However, many in Switzerland believe this is a move in the wrong direction because the AHV pay-as-you-go (PAYG) system and capital based pension schemes have completely different needs.

The changes come at a moment when there is growing concern about the efficiency of official supervision of pension schemes.
After two years of weak returns or losses in financial markets, many funds may now be under funded, although arguments continue as to what “underfunded” means in the Swiss context.
“Even such basics as how long and how much a fund is allowed to be underfunded, will not be answered the same everywhere”, said Ernst Rätzer of Claude Chuard consultants at a conference of Innovation Zweite Säule in Luzern.
“There are only different degrees of uncertainity,” he added.
Rätzer believes pension funds are far less secure than the first pillar (AHV) and private insurance companies.

At the conference, it was outlined that there can be up to eleven federal and 26 cantonal authorities plus controllers and advisors that will check special aspects of a scheme, but no one seems to have a complete insight.
This contrasts sharply with Dutch pension funds as well as private insurance companies in Switzerland, which are tightly and efficiently controlled by a sole government agency.

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