ZURICH - In an apparent retaliatory move, executives of the Swissair Group pension plans say they will review their relationships with the money management arms of UBS AG and Credit Suisse AG.
The two banks were criticized sharply by Swissair Chairman and Chief Executive Mario Conti for delays in providing bridging finance to the struggling airline before it went bankrupt earlier this month.
In a joint statement, plan executives for the 3.8 billion Swiss franc ($2.3 billion) VEF plan for flying staff, the 6.5 billion franc APK plan for ground staff and the 700 million franc KV plan for senior management said they were disappointed by the banks' behavior.
Plan executives intend to get details about the role the banks played in the collapse of Swissair and will consider the implications for the management of the pension plans, according to Urs Ackermann, spokesman for the three plans. He would not give details about how much each firm managed.
Gabriel Herrera, head of marketing and client service in Europe for UBS Asset Management, and Regular Arrigoni, spokeswoman for Credit Suisse, would not comment.
Bankruptcy task force
Executives at the three plans also have set up a joint task force to deal with the implications of Swissair Group's bankruptcy, and leading Swiss pensions experts have been drafted in to give advice.
Werner Nussbaum, an independent pensions consultant and adviser to the Swiss government, will consult on certain legal issues facing the plans during the windup of the sponsoring company.
The task force will address a range of asset allocation, liquidity and legal issues that have arisen since the collapse of Swissair, said Mr. Ackermann.
It was still unclear how many staff members would move to new companies or be made redundant, he said. He expected these issues to be clarified by the end of the month.
Swissair filed for bankruptcy in early October and since then has been in salvage talks with UBS, Credit Suisse and the government. Up to 9,000 jobs are expected to be cut. Swissair subsidiary Crossair, Zurich, is due to take over most Swissair flights in November.
According to actuarial calculations for the end of September, the three plans were funded between 105% and 114% of liabilities, said Mr. Ackermann.
Plans already were under way to pool the investments of the three plans, and trustees were to have voted on the proposal in November. Felix Kottmann, former senior consultant for Complementa Investment Consulting AG, St. Gallen, is advising Swissair on pooling the plans. It is unclear whether the collapse of Swissair will significantly alter those plans.
Asset mixes vary
According to the latest annual reports, for the year ended Dec. 31, the returns and asset allocations of the three plans differ widely.
At the end of last year, the APK plan posted a 3.1% return. The fund invested 31% of assets in Swiss equities; 14% in non-Swiss equities; 3% in alternatives; 17% in real estate; 10% in non-Swiss fixed income; 11% in domestic bonds; 11% in mortgages; and 3% in cash.
The VEF plan provided a 3% return and was invested 10.6% in Swiss equity; 32.4% in global equity; 17.7% in alternative investments; 12.4% in real estate; 4.8% in international bonds; 3.5% in domestic bonds; 17.2% in mortgages and loans; and 1.4% in cash.
The KV fund reported a 1.6% return, with an asset mix similar to that of the APK plan, with 28% in domestic equity; 12% in international shares; 2% in alternatives; 6% in real estate; 20% in international bonds; 24% in domestic bonds; 6% in mortgages; and 2% in cash.
