The SFr 35bn (E22bn) pension fund for Swiss federal employees, Pensionskasse des Bundes (PKB) will have to wait at least until 2006 to switch from defined benefit (DB) to defined contribution (DC), after the Swiss parliament has ruled the move could affect the reform the fund is currently undergoing.
“It’s not that the parliament has rejected our proposal to move to DC,” says Felix Senn, head of asset management at PKE in Bern. “They just said that this is not the right moment to do the switch and we’ll probably be discussing the matter again in five or six years time.”
PKB, which started investing in financial markets a year ago, will be renamed Publica and become a legally separate entity, independent from the government’s budget. This move is part of the fund’s ongoing re-organisation, which started three years ago when telecom group Swisscom set up its own pension fund, followed by Swiss Rail.
The next step will affect the Swiss post office employees, who still remain part of PKB, but could soon have their own pension scheme. If it gets approval from the federal council, the new fund will be separated from PKB in 2002, taking with it around SFr10bn in assets.
“This reorganisation will affect PKB’s investment strategy,” says Senn. “We have to plan our asset allocation, taking into account that SFr10n will go away once the new fund is set up, and that will definitely have consequences in our investment approach.”
Another issue being discussed at the moment is whether the retired postal workers will be transferred into the new fund or stay in PKB.
“We still haven’t decided what we are going to do regarding these retirees,” says Senn. “When the Swisscom’s scheme was created, the retirees of the company were not transferred into the new fund – increasing the federal scheme’s liabilities – and I don’t think we want to do that again.
“Although a final resolution has not been taken as yet, the post office’s retirees are included in those SFr10bn that will be transferred.”