DTA 4 (FRP 4)

DTA 4 (FRP 4)

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DTA 4 (FRP 4)
Calendar24 Oktober 2019

Last April, the Swiss Chamber of Pension Fund Experts adopted the revision of DTA 4/FRP 4, the guideline on the technical interest rate (TIR), which applies to all financial statements from 31 December 2019 and onwards.

Subsequently, the High Surveillance Commission (CHS-PP) has validated this directive as a minimum standard requirement for all pension funds.

 

WHAT IS THE DTA 4 SAYING?

A TIR cap (upper limit) will replace the current reference interest rate, i.e. the TIR will have a fixed cap which shall not be exceeded for single pension funds. This upper limit for valuations at 31.12.2019 amounts to 2.13% if generational tables and 1.83% if periodic tables are used.

The recommended TIR must be below the effective return on assets in the long term with an appropriate margin and can be maintained over a longer period of time.     
 

 

The accredited expert must consider the structure and other characteristics of the pension fund when determining the technical interest rate.

Pensioner-heavy pension funds shall apply a TIR which is close to a low risk interest rate considering the duration of the pension liabilities.

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