Hello all,
We are still waiting for the copies of the slides presented at the Pensioner get-together of February 4th. We are also expecting to have a meeting early March with our usual DISA contacts and have specifically asked to also meet the “Commissioner” early in the game to make sure our points of view are understood.
In the meantime, we share key excerpts of the key events and discussions on February 4 by that Lars Gellerstad shared with a few friends. I think this information is well worth sharing.
Our mailing list is about 300 people so we realise that some people will not get a direct message. Feel free to share this message with others.
We hope to have the slides and some more explanations in our hands by mid-March. We will share new information when received.
We do not expect to get detailed financial numbers until mid-year in keeping with the usual reporting schedule.
Quotes from Lars’ “minutes” of the 4th of February
We
were a pretty large crowd last night at the meeting filling both the conference
room and a set of chairs outside.
The “Country Leader Switzerland” – Simone Arizzi – the research
director for Europe – made a short and enthusiastic review of the New DuPont
portfolio with pieces of Dow added resulting in three more labs/offices in
Switzerland
Then Chris Newton followed with the status of the “closed” pensioner
only fund.
Chris & Patrick are off our Board since January 31. They are replaced with
an intermediary chairman/care taker – a commissioner – for about
six months from the law firm Lenz & Staehelin in Geneva. One of the
bigger law firms with specialist knowledge in Pension Fund matters. This arrangement has been requested and acted
upon by the Geneva “Autorité de Surveillance”
This commissioner will then see to that Board is named by the same Law firm. If
we want a pensioner on the Board which is legally OK we have to approach
Commissioner or the Law Firm via our Association.
With this the umbilical financial cord with DuPont is cut (COMMENT: This is not so, the foundation contract is not rescinded and
the founder DISA is still responsible. By their extra contribution and their
guarantee, they simply put in place an arrangement that will avoid any need of
further yearly contributions in the future)
Some numbers:
After extracting the active members and some retirees from 2019 we now
have 891 beneficiaries out of which 160 are survivors (widows/orphans)
The capital of the fund is now 863 million CHF after the reduction of the
active’s funds and an addition of 137? million paid by DuPont at the end
of 2019. For a total of sum 370 million paid in since the beginning of the
century.
Last year the fund made – only – 8% because by mid-year they sold out all
the stock as a part of change process. Maybe not so good in general but in
hindsight with the Chinese Flu upsetting the markets it was maybe just
good luck.
The Fund’s position now covers in excess of 100% of the pensions to be paid out
at a discount rate of 0.5%. COMMENT: we are asking for numbers.
They will probably not be available for some time as the actuaries have to do
their calculations, but the current understanding is that the coverage is more
than enough The future will likely be safe investments that gives some
1.4% (state bonds I guess) but the new board decides the investment policy and
risk levels.
It looks like a safe revenue for the next 30-35 years for the lawyers and the
fund’s service companies like auditors and presumably the Autorité de
Surveillance.
An additional 100 million in the form of a guarantee runs for 15 years and can
be prolonged another 10 years or more. This money can be called anytime by the
New Board in full or in part.
All of this was done will full insight by the Geneva Authorities.
Technical note: The actuaries
calculate for EACH one of us what the Fund’s liability is. That means that they
take the amount of yearly pension we get and multiply it by a factor related to
our age, usually at the end of the year. That factor is an official number
revised every 5 years by the confederation to calculate the average life
expectancy. The actuary multiplies the yearly income by the number of years
statistically linked to the pensioner’s age and obtains the funds required to
be available. For example, a pensioner getting 60000 CHF a year aged 70 years
will require a reserve of 960’000 CHF. A discount rate is applied to this
number. In the past we had rates of about 5%. In this example that meant that a
sum of 650’000 CHF was required.
By reducing the rate to 0.5% that means that 925’000 CHF are required and therefore the future payments are much better guaranteed.
XDISA COMMITTEE
Pierre Chaigneau – president
Georges Darrer – Treasurer and website
Ed Peters
Peter Taylor