Guidelines for pension fund trustees

The LOB Guarantee Fund is a national institution for occupational pensions and is financed by the pension funds. Led by the Board of Trustees, its members include representatives of the employer and employee umbrella organisations as well as the public administration; it also has one neutral member. The Guarantee Fund performs a wide variety of tasks in the occupational pensions area. As the central liaison office for the second pillar, it is an important contact point for people and organisations with questions about occupational pensions.

One of the Guarantee Fund’s primary tasks is to protect the retirement assets of all insured persons. If a pension fund becomes insolvent, the assets of all those insured are secured up to a defined ceiling. Employees and pensioners are therefore protected against the loss of their entitlements.

The Guarantee Fund investigates whether a pension fund’s insolvency is down to improper conduct on the part of the people responsible. If serious errors are identified, the Guarantee Fund can file a claim for damages. Experience over the years has shown that the system of equal representation on the trustee boards of pension funds works very well in the vast majority of cases. Only on rare occasions has the Guarantee Fund had to assert liability claims. Convictions of the people responsible can cause uncertainty. In cases that resulted in a liability claim, corresponding patterns of behaviour on the part of the people responsible were generally identified.

As trustees of a pension fund, you play an important and responsible role in ensuring that it is led by the social partners in a cooperative manner.

With these guidelines we aim to point out potential problematic situations and patterns of behaviour in simple form, rather than present an exhaustive list of the tasks of a board of trustees.
Do you have any questions? We are here to help if you require further assistance, and wish you continued success in your role as a trustee.

Dr Edith Siegenthaler,
Chairperson of the Board of Trustees of the
LOB Guarantee Fund

As a trustee, you are a member of the governing body of a pension fund and are responsible for its overall management. This includes the strategic leadership of the pension fund as well as organisation and oversight. Art. 51a LOB lists the non-transferrable tasks.

You are responsible for managing the pension fund in compliance with the law. This includes ensuring its financial stability by matching the target benefits defined in the regulations with the available funds. You determine the investment strategy and its implementation, in line with the pension fund’s risk capacity. You decide on the use of unallocated assets, and in the event of a shortfall in coverage you take the necessary action to restore financial equilibrium.

You oversee the operational management of pension provision as well as the investment process. You ensure that decision-making and control processes are transparent and comprehensible. When delegating day-to-day management and investment activities, you make sure the remit is clear and, together with the occupational benefit expert and the auditors, appoint the governing bodies. In addition, you ensure that the insured members receive accurate information.