Sample case

Since 2013, the Board of Trustees has been grappling with problems of the pension fund’s operational management. It is one of the Board’s chief concerns that the pension fund continue to have a sustainable form of day-to-day administration. In the fund’s 2013 annual report, the Board communicated this in transparent terms to members and decided to form a working group under the pension fund’s Board of Trustees and the supplementary fund to investigate various models for “sustainable administration” in the near future. Following intensive discussion of the working group’s proposals, the Board of Trustees decided on the overall approach and model.

Sample case – Evaluation process and selection of new administrative services provider

The Board of Trustees invited the key providers of outsourcing services in the area of occupational pensions on the Swiss market to participate in a tender. The providers were put through their paces. Providers who made the short list were subjected to a rigorous, intensive evaluation process. They were not only required to disclose their administrative processes, but also the stability of their IT systems and internal audit-compliant control mechanisms, along with project planning expertise and experience in migrating pension fund data. Another important point was that a defined benefit plan had to be implemented correctly in actuarial and accounting terms. During this evaluation, the Board of Trustees did not rely only on documents and presentations but also undertook in-person inspections and held interviews with those responsible for directing and doing the work.

Following this careful selection process, the Board of Trustees decided to hand over the administration of the pension fund as of 1 January 2015 to the administrative and consulting firm Swiss Life Pension Services (SLPS).  SLPS won the tender thanks to its professionalism, transparent communication, partnership-based collaboration and focus on implementation and results, as well as to the quality of its employees.

As a subsidiary of the Swiss Life Group, SLPS was examined closely by the Board for its potential proximity to the insurance business and any possible limitations to its independence that would result. The result of this scrutiny confirmed the independence of SLPS in its consulting and administrative activity and that its shareholder structure does not affect clients – it may even be an advantage in some instances.

Sample case – SLPS services for the pension fund

The transfer of member data took place prior to 1 January 2015, in a migration process that had been planned and coordinated with the Board of Trustees. Intensive testing of data and calculations were also part of the migration process. This ensured the consistency of personal data and the correct implementation of regulations in the new IT system. SLPS was able to take over the outsourced tasks on schedule.

For the pension fund as well as its supplementary fund, SLPS has thus been performing the following management and administrative services since 1 January 2015:

Operational management – The pension fund’s operational management comprises the technical and HR-related management of the fund’s operation. The managing director takes his orders from the Board of Trustees. Together with the chairman, he prepares the Board meetings and consults on questions using his specialist expertise.  The managing director plans and coordinates all activities between the fund and external providers (regulatory authorities, auditors, actuarial experts etc.). He also ensures that the Board’s resolutions and decisions are implemented. An additional task is supervising employees and ensuring quality in the day-to-day work of administration.

Technical administration – Technical administration encompasses the inventory management of personal data of active members and pensioners as well as the calculation of regulatory benefits and payout in the event of a claim. Regulatory terms and the relevant laws must be followed at all times. Address changes, cases of disability and death as well as new hires (including integration of transferred vested benefits) and employee departures must also be kept up to date in the IT system. Similarly, the benefit payments associated with these events (e.g. pension benefits, lump-sum payments, vested benefits etc.) must be made.

Commercial administration – Commercial administration ensures that business transactions are booked (new hires, employee departures, pension payments etc.). Commercial accounting processes must be coordinated with inventory management. Commercial accounting is also responsible for preparing the pension fund’s annual financial statements. This includes the balance sheet, the operating account and notes to the financial statements.

Sample case – Summary

The Boards of the pension fund and the supplementary fund are glad to have found a professional partner in Swiss Life Pension Services Ltd. who can meet their high standards for quality and governance. They are convinced that outsourcing these management and administrative duties has ensured the continuing sustainable management of their employee benefits institution.