SWITZERLAND - The Zurich Canton administration has dismissed a motion to outsource the asset management of the scandal-ridden BVK Pensionskasse from the financial department.
Deputies in the canton's assembly had suggested the creation of an investment board for the civil servants' fund, and were critical that the current structure had led to conflicts of interest.
"The head of asset management had an extraordinary amount of power and it is not acceptable that a single person can decide on their own how CHF20bn (€15bn) are to be invested," said a motion laid before the cantonal assembly.
In its response, the Zürich government pointed out that several investigations were being conducted into the allegations of corruption, in addition to legal proceedings started by the public prosecution office.
The authorities added that it would not make sense to change organisational structures before these enquiries are finished.
Further, the government stressed that decisions on liabilities, such as interest rates, should not be separated from the asset management. It also noted that the re-structuring of the investment council, which as of the beginning of the year now included both employee and employer representatives, was sufficient for now.
The council currently meets six times a year but the number of sessions will be increased from next year.
Meanwhile, the Zurich cantonal authorities are continuing to inmplement the decision made before the financial crisis to set the BVK up as a fully independent entity.
However, legislation stipulates that is only possible once the Pensionskasse is again fully funded.