For 10 years the annual reports for PKB have been rejected by the federal authorities. This is because PKB cannot guarantee that its 200,000 individual dossiers are correct, mainly due to computer problems. Therefore, its total liabilities put at SFr38bn may be incorrect too.

A new task force has been working for two years to correct and complete the dossiers, but it acknowledged last month at a press conference, that this will take two more years to finish. It claims that the enormous political pressure" is demotivating its employees.

The funds of Swiss Rail have their own administration and were not affected by the troubles of PKB. But the assets have been managed in the same manner. As Swiss Rail is being privatised in January, it has to constitute its own fund.

The dossiers of about 20,000 Swisscom employees are being transferred over in the next few weeks. The Post will follow in the year 2003. After these spin-offs, PKB will cut in half to 100, 000 and be limited mainly to civil servants. PKB is constructed as a mixture of a pay-as-you-go-system and a fund. Contributions of the members were made to the federal treasury and earned the interest on Swiss Government bonds, but with a minimum of 4%. This now amounts to SFr 25bn. However, the employer contributions of SFr12bn were not paid in. The coverage of assets has fallen to 65%, but Swiss government guarantees the pensions.

In the meantime, the success of other public funds, which were reformed in the early 1990s, and of private pension schemes became so evident that even the Swiss government realised it would lose too much money. If the government refinanced its contributions and debts with bonds at a long term cost of 4.8% and PKB invests its assets in a mixed portfolio and obtains 7.6%, the difference of almost 3% would help to reduce the PKB deficit dramatically by SFr1bn yearly, says Thomann in the official memorandum. That should convince parliament to shift the asset management of PKB."