Switzerland releases draft report on pension fund voting rights law
SWITZERLAND – The Swiss government, in its decree on the implementation of the so-called Minder Initiative, wants to force pension funds to exercise their voting rights but will allow them to abstain or not take part in votes in "certain cases".
In March, the Swiss public voted overwhelmingly in favour of a motion brought forward by Swiss MP Thomas Minder that aimed to curb "excessive" manager payments in listed companies.
The draft decree, which will eventually be added the constitution, also included an obligation for Pensionskassen to exercise their voting rights – a requirement opposed by many experts and pension funds.
Interested parties now have until 28 July to comment on the draft law [in German] presented by the Swiss Justice Ministry before the weekend.
In line with the demands set out in the Minder Initiative, the government wants to oblige pension funds to exercise their shareholder voting rights at AGMs.
However, it said it would also allow schemes to abstain or not take part in votes at all if it is "in the interest of the pension fund members".
Under the terms of the decree, a pension fund's board must draw up rules spelling out exactly how it will make decisions regarding members' interests.
In a televised press conference, a Justice Ministry spokesman said the government had set the fines for the violation of these regulations "milder" than other penalties within the legal framework "on purpose".
Pensionskassen will also have to report their shareholder voting activity to members at least once a year.
The new regulation is set to come into effect from January 2014, after which point Pensionskassen will have one year to comply.
At the press conference, justice minister Simonetta Sommaruga confirmed the "tight schedule" for the implementation of the ruling, which will come into effect before it is set down in the constitution.
She also confirmed a revision of the constitutional framework starting in the second half of 2014.
"I am well aware this course of action is problematic from a constitutional point of view, as the government is temporarily overruling parliament," she said. "But the majority of the people have voted this way."