From 1 January 2011, vested benefits institutions will be able to offer their members more choice in investing their occupational vested benefits. Hitherto, only savings accounts and Swiss collective investments (mutual funds in particular) were permitted. The change in regulations means that persons will also be able to invest their pension assets in foreign funds approved by FINMA for distribution in Switzerland. Moreover, specific direct investments such as Federal bonds, fixed-rate notes and time deposits will also be permitted. Vested benefit foundations will be allowed to grant asset management mandates to banks, fund managers, brokers and asset managers of collective investments in compliance with the Federal Law on Collective Investment Schemes (KAG/LPCC). The latter are under FINMA's direct preventive oversight.
The Federal Council justified the change in regulations with the need to liberalise the market and to encourage competition between pension institutions while safeguarding investor security.
The restrictions on pension asset investment possibilities first came into effect two years ago. Private clients are only allowed invest their pension assets directly in equities, corporate bonds or mortgage loans for a transitional period expiring on 1 January 2012. Asset managers controlled by a self-regulatory organisation will no longer be allowed to accept management mandates for vested pension assets.
Liberty trusts, however, that the various interventions may bear some fruit. We have to examine the new ordinance and the relevant explanatory notes very carefully before we can take a stance on the future business model. As soon as recommendations are approved by the Foundation Board, we shall contact everyone concerned for a personal discussion. Any non-compliant investment directives and models will have to be adapted by 1 January 2012.