Pension funds: A rigid, overregulated world. Or are there still areas in which it’s still possible to offer pioneering services?
Yes, actually – for an independent, collective institution they do still exist. Perhaps not on such a spectacular scale as before, but we can still make a difference. Notwithstanding the extensive legal and regulatory framework, we operate in an environment where we nevertheless need to remain flexible and act accordingly, because external influences can impact us in a variety of ways.
Financial-market interest rates have gone in one direction only over the past ten years, and the fall in interest rates has led to a dearth of investment opportunities. These difficulties have led to a situation where many in-house company pension funds have been wound up and instead become affiliated with a collective pension foundation such as ours. In addition, the prospect of falling returns has hit the full insurance model – which until then had been a very attractive option for SMEs, in particular due to the security it offered in terms of investments. This too has made a massive contribution to the migration from full insurance to independent models.
The independent collective pension foundations have consequently become much more important. The independent regulatory commission was sceptical, issuing an increasing number of directives designed to ensure better supervision. We took this very seriously. Asga has gained national importance due to its strong growth over the last ten years and has obviously moved into the spotlight. By setting up a robust compliance and corporate governance organisation, we are leading by example on this front.
The founding members probably knew each other personally. But even today retirement provision is an extremely personal matter. Members trust us with their pension assets and we are highly conscious of that responsibility.
What are the major issues facing a pension fund seeking to move with the times?
Our national importance means we are also on the radar for the Climate Alliance and the WWF, which put us to the test on a regular basis. We have launched an ESG strategy as well as a climate strategy, and are a member of the Swiss Association for Responsible Investments (SVVK – ASIR). However, that’s by no means the end of it – we need to develop further in this area. It’s a cultural strategy which we’re integrating throughout the organisation.
What about digitalisation?
Being IT-savvy is much more important these days. By automating and digitalising processes, we can lower costs and at the same time improve service quality. The aim is for insureds and members to be able to process most administrative pension-fund tasks online – as is already the norm with online banking, for example. This frees up our employees’ resources, enabling them to concentrate on more complex matters. Personal support and proximity to insureds are vitally important for Asga. Indeed, that’s always been the case. 18 member firms were involved in the founding of Asga – and all of them knew each other personally. Retirement planning is a very personal matter, and the insureds trust us with their pension assets. That’s a big responsibility for us – and the reason why we take a prudent approach.
There’s a lot still to come in terms of digitalisation over the next few years. Life insurers are clearly the pioneers here, but the fact that we lag behind slightly is solely down to budget reasons. We’re obviously not in a position to invest tens of millions in this area every year. On the other hand, that gives us the advantage of only implementing something that’s already been tried and tested. In terms of digitalisation in particular, our roadmap is fairly full for the next strategy period. We examine everything very carefully and only proceed if it makes sense and generates added value for members and insureds. Examples include simplification or improvements in quality but also improvements in processes to make them more efficient and reduce costs.