A reform for more transparency awaits professional pensions

A reform for more transparency awaits professional pensions
A reform for more transparency awaits professional pensions
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The CHS PP has had a new president since the beginning of the year. Laetitia Raboud underlined the need for standardization of the surveillance activities of regional authorities, themselves chaperoned by the federal commission. “The challenges are not the same in Zurich, Geneva or the Jura,” explained the trained lawyer. We must ensure that the same level of supervision is applied everywhere, by making the appropriate legislative tools available.”

For the president, Vera Kupper Staub, “the supervision of collective and common institutions needs to be reformed. Unlike other comparable supervisory systems, such as the supervision of health insurers, the instruments of the regional supervisory authorities and our commission provided for by the BVG have not been adapted to the changing circumstances of the 2nd pillar.”

Lack of transparency

In recent years, the commission has observed a phenomenon of concentration of pension institutions: while each company traditionally had its own structure, the complexity of the law on professional pension provision (LPP) and its constraints have meant that a large number have the choice of affiliation with a larger structure. “This has positive effects,” continues Laetitia Raboud. More professionalism, better cost distribution and tailor-made solutions that meet the needs of policyholders. However, this concentration also creates difficulties. If the operating company is focused on quick wins and growth, it will not always act in the interests of the policyholders. The complexity of these collective and common institutions also creates less transparent structures.”

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The challenge of this lack of transparency lies in particular in the management of contracts and legal acts entered into by the pension institution with close people. The commission will develop guidelines containing minimum requirements with the aim of minimizing the risk of conflicts of interest and preventing non-market advantages from being obtained to the detriment of the institution and policyholders, announced Laetitia Raboud.

According to a survey carried out by the commission, the vast majority of pension institutions consider that taking into account sustainability risks is now part of the fiduciary duty of care. They also say they want to contribute to compliance with the Paris Climate Agreement.

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