• The work contract and the law stipulate that both the employer (DISA) and employees (active participants of the Fund) are liable to contribute to the Pension Fund. The percentage applied for these contributions varies. In DISA, the rates were 6% for the employee and 16% for the employer.
• When an employee retires or leaves the Company, the work contract ends at that point. All formal connections between the individual and the Company cease. The Pension fund then takes over the legal obligations related exclusively to the pension scheme and is then liable to pay pensions or to transfer the portable portion of the pension to the new employer, as the case may be. An exception applies to intercompany transferees, whose pensions may be adjusted when, for example, actual exchange rates deviate from exchange rates applicable at the time of retirement. These adjustments are administered by DISA.
• The contractual terms of these liabilities are contained in the Pension Fund Rules.
• The Pension Fund rules are subject to Swiss law and surveillance.
• The DISA Pension Fund specifically states that no adjustments to pensions are included. However, the law requires the Pension Fund board to review the situation and consider adjustments “if sufficient funds are available”. No specific guidance is given, but it is implied that primary obligations are to be met first, i.e :
- Full coverage of obligations (100%) coverage
- Reserves are funded to cover increased longevity (5%)
- Reserves are funded to cover investment/currency risks (~10-15%)
The DISA Pension Board has set a target of 124% to achieve this objective.•