echo interview with Hanspeter Konrad, Director of the Swiss Pension Fund Association (ASIP)
elipsLife echo: Mr Konrad, the Swiss Pension Fund Association (ASIP) represents the interests of over 900 different pension funds. How do you manage to reconcile this array of different interests?
Hanspeter Konrad: Many aspects of the second pillar are crucial for all pension funds, whether large collective institutions or small company funds. I’m thinking here of funding, the principle of partnership-based leadership or the general belief in a strong, collectively organised second pillar.
The ASIP recently called for agents’ commissions for the second pillar to be banned. Why?
The commissions have been a topic for years now. We have nothing against brokers. On the contrary, the issue has to do with the form of compensation: Should the collective foundations that want to grow and seek new employer mandates be required to pay the brokers? Or should it be the contracting entity, i.e. the employer? We take the view that it’s more appropriate for the contracting entity seeking a pension plan solution to finance the broker and not the pension fund. In this case, there would be far less potential for conflicts of interest.
Many in the insurance industry believe that changing the system along these lines and getting rid of commission payments is a step too far. Is the ASIP on its own here?
We’ve discussed this issue in depth within the ASIP. And Individual pension funds have also approached us that don’t don’t pay brokers commission and consequently don’t receive any mandates. As a result, we’re now talking about the problem with the brokers, the insurance association and the social partners. I should mention that the structural reform of 2011 – introducing stricter guidelines regarding governance and transparency for the Federal Insurance Law (BVG) – also demanded greater transparency on broker commissions from the employers’point-of-view. Against this background, volume-related commissions are forbidden. We’ve observed, however, that attempts to put this transparency into practice have only been half-hearted. Consequently, we need to carefully examine the form of remuneration for brokers and modify this process accordingly.