Pension fund: right to transparency
Pension funds are complex entities. Since 2004, they have been required to provide transparent information. What do employers need to know about these regulations, and what steps can they take themselves? By Hansjürg Reber, banking expert, financial planner, social insurance specialist, and editor at *Beobachter*.
Sponsorship of a curling club, generous expense allowances to the Board of Trustees or excessive expenditure on advertising were violations by a pension fund against which legal action was taken. Since April 1, 2004, this has no longer been so easy. This is because a package of provisions came into force at that time that obliges pension funds to provide insured persons with transparent information.
The contribution system, financing, investments and accounting of a fund must be transparent for all insured persons. The fund must also provide open information about the return on capital, the risk experience, the administrative costs, the contribution margin and the formation of reserves. It must also provide insured persons with the annual financial statements and annual report on request.
What can you do as an employer to ensure that your employees are well informed? Make sure that everyone has their insurance certificate and the current regulations. The names of the members of the joint body of the fund must also be known. It is a legal requirement that every pension fund must appoint a so-called parity body - usually referred to as the Board of Trustees. Equal representation means that an equal number of employer and employee representatives sit on the highest governing body of the pension fund. If the names of the representatives are known, it is possible for your employees to obtain information about the fund from the representatives. Employees can also suggest changes to the regulations, particularly via the employee representatives. For example, if they want a lower minimum salary than the statutory CHF 20 520, so that part-time employees are also better insured, this is best done via the employee representatives. Also make sure that both employer and employee representatives have the necessary knowledge. The law stipulates that further training must be financed by the pension fund. In particular, the cantonal BVG supervisory authorities offer courses that enable representatives of joint bodies to acquire or deepen their knowledge.
The latest figures show that a large number of pension funds are underfunded, i.e. can no longer meet their current and future obligations in full. This fuels fears among insured persons that their future retirement pension is at risk. It is therefore advisable to inform the insured about the current coverage ratio of the pension fund. By consulting experts, you can also help to ensure that no questions remain unanswered. So do your bit for greater transparency, even if it is primarily the task of the pension funds to provide insured persons with comprehensive information.
The contribution system, financing, investments and accounting of a fund must be transparent for all insured persons. The fund must also provide open information about the return on capital, the risk experience, the administrative costs, the contribution margin and the formation of reserves. It must also provide insured persons with the annual financial statements and annual report on request.
What can you do as an employer to ensure that your employees are well informed? Make sure that everyone has their insurance certificate and the current regulations. The names of the members of the joint body of the fund must also be known. It is a legal requirement that every pension fund must appoint a so-called parity body - usually referred to as the Board of Trustees. Equal representation means that an equal number of employer and employee representatives sit on the highest governing body of the pension fund. If the names of the representatives are known, it is possible for your employees to obtain information about the fund from the representatives. Employees can also suggest changes to the regulations, particularly via the employee representatives. For example, if they want a lower minimum salary than the statutory CHF 20 520, so that part-time employees are also better insured, this is best done via the employee representatives. Also make sure that both employer and employee representatives have the necessary knowledge. The law stipulates that further training must be financed by the pension fund. In particular, the cantonal BVG supervisory authorities offer courses that enable representatives of joint bodies to acquire or deepen their knowledge.
The latest figures show that a large number of pension funds are underfunded, i.e. can no longer meet their current and future obligations in full. This fuels fears among insured persons that their future retirement pension is at risk. It is therefore advisable to inform the insured about the current coverage ratio of the pension fund. By consulting experts, you can also help to ensure that no questions remain unanswered. So do your bit for greater transparency, even if it is primarily the task of the pension funds to provide insured persons with comprehensive information.
Book tip:
Pension fund of Ueli Kieser, Jürg Senn
What is the pension fund all about? Around 625 billion Swiss francs. So it's worth taking a closer look. "Pensionskasse. Pensions, financing, security, benefits", the new guidebook from the Beobachter publishing house, takes a close look at occupational pensions.
240 pages, paperback
2nd, updated and expanded edition 2009
Beobachter-Buchverlag,
ISBN 978-3-85569-425-9,
Fr. 38.-. To be published in mid-October 2009. We reserve your order!
New for SMEs: legal advice on issues affecting your company
The Beobachter's new service: competent legal advice for SMEs and their employees. 6 months for only Fr. 99.- (introductory price).
You can reach the legal experts Monday to Friday from 9 a.m. to 1 p.m. on 043 444 54 09. You also have full access to the advice platform Helponline.ch and an Beobachter magazine every 14 days. The price also includes a gift: the standard work for SMEs from Beobachter-Buchverlag,
"How to get your money", worth CHF 48.
Order the consulting subscription for SMEs at: www.werbewoche.ch or by phone: 0800 83 0800.
The Beobachter's new service: competent legal advice for SMEs and their employees. 6 months for only Fr. 99.- (introductory price).
You can reach the legal experts Monday to Friday from 9 a.m. to 1 p.m. on 043 444 54 09. You also have full access to the advice platform Helponline.ch and an Beobachter magazine every 14 days. The price also includes a gift: the standard work for SMEs from Beobachter-Buchverlag,
"How to get your money", worth CHF 48.
Order the consulting subscription for SMEs at: www.werbewoche.ch or by phone: 0800 83 0800.
