Zürich outsources pensions
SWITZERLAND - The pension scheme for government staff in the Swiss canton Zürich will become a separate entity.
The local government signed the bill today on the creation of a foundation, which will run the pension scheme and take over all assets and liabilities.
Planned since 2003, the step could only be taken now because one of the prerequisites of autonomy for the Pensionskasse was full funding and this was only reached at the end of last year.
The local government said in a statement the outsourcing of administration and transfer of the liabilities of the pension scheme will reduce conflicts of interest.
"The board of the foundation will only have to consider the interests of the members and not - like the current boards - also those of the canton," the local government noted.
Two examples of conflicts of interests cited are negotiations on the price if the government was to lease a piece of land owned by the BVK or the question of whether surplus assets in the fund could be used by the government.
It was also noted the decision-making process will be shorter than under the current administration.
Full autonomy for the pension fund will be granted as soon as the foundation is fully set up and the fund reaches a funding level of 110%, but not before January 1, 2009. The Pensionskasse is currently 105% funded.