FINMA’s response to the consultation on structural reform to occupational pensions

FINMA supports the Federal Council's objective of improving the quality of asset management in occupational pensions as part of the structural reform to occupational pension provision. This structural reform includes, for example, plans whereby only persons and institutions supervised by FINMA will be allowed to manage occupational pension schemes. However, this provision cannot currently be put into practice because of the lack of a legal basis in the financial market legislation. FINMA therefore referred this matter to the Federal Social Insurance Office as part of the consultation.  
The Federal Council opened the consultation process on structural reform to occupational pension schemes on 24 November 2010. The planned ordinance provisions will strengthen supervision of occupational pension schemes, as responsibilities will be clarified and, for the first time, an independent commission will assume overall supervision. The provisions also specify the tasks incumbent on each of the various players in pillar 2 pension provision. Extensive, detailed governance and transparency provisions in relation to occupational pensions will be introduced as well.

FINMA shares the view that the fiduciary management of occupational pension monies justifies strict requirements on asset managers. However, the planned Article 48f Paragraph 3 of BBV2 – under which only persons and institutions supervised by FINMA may manage occupational pension schemes – will not achieve this objective.

The question of which persons and institutions are subject to supervision by FINMA is governed by the financial market legislation. However, these laws, in particular the Federal Act on Collective Investment Schemes (Collective Investment Schemes Act, CISA; SR 951.31), do not provide any legal basis for the supervision of occupational pension institutions; only managers of collective investment schemes are subject to or eligible for supervision. If BVV2 were to make supervision by FINMA mandatory, many managers of occupational pension schemes could be expected to seek to force supervision by pro forma launches of statutory supervised activities. FINMA is not prepared to supervise assets managers purely on the basis of such pro forma activities. This would in no way help Switzerland's reputation as a financial centre.

The regulation of asset management is the subject of intensive debate both internationally and within Switzerland at present. It is conceivable that supervision will be required in future and that the law will be changed accordingly. Until a legal basis is established, however, any requirements for managers of occupational pension schemes to be subject to FINMA's supervision must be abandoned.