Swiss lawmakers have presided over a “missed opportunity” to enhance the management of workplace pensions, according to the country’s asset management trade group.
The Swiss Asset Management Association (AMAS) claimed that the Council of States had “missed an opportunity to professionalise occupational pension provision”, something it believes could enhance returns further.
The body highlighted that pension funds represent the largest saved assets for many Swiss people. Yet, the required skill and knowledge levels of the boards of trustees that oversee such schemes were lacking, given their “enormously high fiduciary responsibility”.
“The Swiss pension fund system urgently needs modernisation in the central areas of investment competence and risk management to better exploit the return potential in the individual pension funds,” it said.
“For some time now, the investment return on Swiss pension fund assets, the so-called third contributor, has contributed more to asset growth than employee or employer contributions.”
It claimed the investment returns amounted to an average of 30 billion Swiss francs per year to pension fund asset growth over the past 15 years.
“Implementing the motion would have made a significant contribution to further strengthening the pension funds,” it added. “A comprehensive professionalism of the investment management of pension fund assets has a positive effect on the exploitation of existing return potential, taking into account the risk capacity.”
The motion, submitted by the Social Security and Health Committees in the Swiss Parliament, sought to improve investment competence, ensure comprehensive risk management, and abolish limits on asset class exposures to better reflect different risk structures.
AMAS said strengthening Swiss pension funds and individual pension provisions “remains a strategic priority”.
“The association will continue to advocate strengthening the third contributor, and thus the occupational benefit scheme,” it said.
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