Pension Consultant Blamed in Swiss Fund's Deficit

August 25, 2005 ( - A review committee has placed part of the blame for the deficit at a Swiss teachers pension fund on the fund's consultant who had recommended a sizable equity allocation.

According to an news report, a Swiss parliamentary panel investigating the BLVK fund, said Aon Chuard, part of the Aon network and BLVK’s investment consultant in the late 1990s, shared some of the blame for the fund’s CHF1bn (€646m) deficit. The consultant had suggested in the 1999-2000 time frame that the fund allocate 42% of its assets to an equity position – just before world equity markets suffered major losses. In fact, the committee has recommended the fund consider suing Aon Chuard.

However, the committee’s report placed most of the blame on Hans-Peter Sieber, BLVK’s director at the time of the decision, as well as supervisors of the pension fund. It noted that despite heavy losses at the fund caused by the equity bubble’s burst, Sieber was not removed.

Since the report was released, Aon Chuard has angrily dismissed the charge, noting that it had acted merely as an advisor and was absolved of responsibility for investment decisions made by the BLVK.   “Our consultants must only abide by the rules and regulations for our profession,” the firm said in a statement.   “This means they cannot be made responsible for decisions regarding the investment strategy. That lies entirely with the client.”

Aon Chuard also said it was “outrageous” that the parliamentary committee decided to judge its behavior “according to political instead of professional criteria”.

BLVK provides a pension to teachers and other educational staff in and around the Swiss capital. It has around 15,250 members and 5,350 pensioners.