state street retains Swiss pension mandate

State Street, the Boston-based asset manager, will continue to oversee CHF 46 billion of Swiss pension funds after a narrow vote in the Swiss lower house. Lawmakers in Bern voted 98-89 on Thursday against a proposal aimed at shifting control to a domestic entity amid concerns over US political influence. The debate highlighted fears that the administration of US President Donald Trump could use State Street to leverage pressure against Switzerland. However, a majority of lawmakers dismissed these concerns, aligning their votes with the Swiss government’s advice, which cited potential significant costs if State Street’s contract was revoked prematurely. This week’s decision maintains the mandate awarded to State Street in late 2023, which ended UBS Group AG’s 25-year tenure. Compenswiss, the state agency overseeing the fund, would have faced the substantial task of re-running the tender process if the bill had passed. Swiss Interior Minister Elisabeth Baume-Schneider argued that the proposed bill would damage the reputation of Switzerland as a financial center, while Kathrin Bertschy of the Green Liberals emphasized the importance of maintaining legal certainty.

state street retains Swiss pension oversight

Conversely, Swiss People’s Party lawmaker Thomas Matter stressed the systemic relevance of the pension assets, advocating for the utmost caution. For State Street, one of the world’s largest custodian banks, the Swiss mandate generates significant annual revenue and symbolizes a victory over the traditionally dominant Swiss financial institutions. The bank confirmed that the assets remain within Switzerland, despite its global oversight. Meanwhile, scrutiny of other US banks in Switzerland continues. This week, Zurich’s cantonal government was questioned about $36 billion managed by JPMorgan Chase & Co. for the canton’s BVK pension fund, an issue that remains unresolved for now. State Street has expressed satisfaction with the parliamentary decision, committing to continue managing the assets responsibly, backed by over 230 years of experience in the field. The outcome underscores ongoing discussions about the influence of foreign entities in Switzerland’s financial sector and the cautious balance lawmakers seek to maintain between global cooperation and national control. Image Credits: Photo by Arisa Chattasa on Unsplash