Pension actuaries campaigning for changes in AHVG/LAVS bill

The bill provides that, for each new member, occupational benefits institutions will have to ask the 2nd pillar office if the member has any vested termination benefits (new Article 11(3) of the Vesting Law (FZG/LFLP)). The Swiss Chamber of Pension Actuaries rejects this additional constraint. In its opinion, this is pointless over-regulation, devoid of any practical purpose.

Regulating abuse to generate disproportionate additional costs

At the same time, members' individual responsibility is being degraded, and occupational benefits institutions are being loaded with unnecessary additional work.  Moreover, this extra work will involve high costs which would be passed on to members.

The obligation to transfer a member's vested termination benefit to his new occupational benefits institution is clearly stipulated in Article 4(2bis) FZG/LFLP (also see Article 3(1) FZG/LFLP: transfer to the new occupational benefit institution). Under the existing law, new members already have an obligation to inform. If they fail to do so, Article 4(2) FZG/LFLP provides that the termination benefit must be transferred to the Substitute Occupational Benefits Institution.

Occupational benefit institutions already have the possibility under existing regulations to oblige members to transfer their vested termination benefits (see Article 11(2) FZG/LFLP). This procedure solves the problem, the responsibility lies with the member.

Inquiries create unnecessary administrative work

Because occupational benefits institutions only file declarations with the 2nd pillar central office once a year, the new rule is liable to cause innumerable empty runs and disproportionate administrative cost.

Occupational benefits institutions would have to make new inquiries with the Guarantee Fund every time a new member joins their institution; moreover, they would then have to establish the amount of the vested termination benefits and, if a member has more than one account, decide which account to collect and for what amount. In this respect, the new provisions are not practicable and must be rejected.

The argument that tax rules must be applied falls short of the mark

According to the Swiss Chamber of Pension Actuaries, the argument that this procedure is designed to safeguard the public interest in fiscal compliance also falls short of the mark. Firstly, it is not for occupational benefits institutions to act as the "extended arm" of the tax authorities. Secondly, when making a tax-deductible purchase of benefits, members are in any event required to declare any vested benefits to their occupational benefits institution (Article 60a(1) and (2) BVV2/OPP2). In such cases, the tax-deductible purchase is reduced by the amount of any available vested benefits.

For the Swiss Chamber of Pension Actuaries, this a half-baked measure which is not conducive to the desired result. Therefore, the Chamber recommends that the measure be revised in consultation with all stakeholders.

Liberty Pension shares this opinion and also recommends a revision of these rules.