Act concerning the Basel-Stadt Pension Fund (Pensionskassengesetz, PKG) - Name, Legal Personality, and Domicile (PKG)

1. Under the name Pension Fund Basel-Stadt ("PKBS"), there exists an independent public law institution with its seat in Basel-Stadt.

1. The PKBS manages the occupational benefits of the employees of the canton (State sector) as well as the staff of affiliated employers.

2. Affiliation agreements may be concluded with employers that fulfill tasks in the public interest or are closely associated with the Canton of Basel-Stadt. An affiliation agreement is also to be concluded for the employees of the canton (State sector); the competent authority is the Executive Council.

3. The PKBS is free to determine its benefits and organization within the framework of the provisions of this law and the Federal Act on Occupational Old Age, Survivors', and Invalidity Pension Plans (BVG) of June 25, 1982.

4. The PKBS may undertake additional tasks that are substantively related to its purpose.

1. The PKBS is operated as a collective institution.

2. The employees of the canton (state sector) and those of each individual affiliate form separate pension schemes, each managed on its own account.

3. The affiliates bear the costs during the duration of the affiliation.

4. All individuals in the state sector and other affiliates who receive an annual salary and are therefore subject to compulsory insurance according to the BVG must join the PKBS. Exceptions must be noted in the affiliation agreement.

5. In the state sector, a special regulation for magistrates is permissible, provided that the additional costs associated therewith are financed by the canton.

6. To compensate for inflation on current pensions, a separately designated "Inflation Fund" may be established for each affiliate. The funds in the Inflation Fund are to be reasonably interest-bearing and used exclusively for increasing current pensions.

7. The board of directors may merge individual affiliates into a joint pension scheme.

1. Upon dissolution of an affiliation agreement, all active insured persons and pension recipients shall be transferred to the new pension institution. The assets allocated to the pension plan shall be transferred to the new pension institution while preserving the rights of the beneficiaries or distributed to the beneficiaries in a legally prescribed form. Further details are governed by the provisions on partial liquidation.

2. The retention of individual groups of insured persons or pension recipients requires an affiliation agreement that ensures the financing of the actuarially necessary costs. The modalities shall be determined by the Board of Directors upon the recommendation of the expert for occupational pensions, based on professional criteria. If no new pension institution confirms in writing that it will accept the pension recipients under the same conditions, the termination of the affiliation agreement shall have no effect.

3. Paragraphs 1 and 2 shall apply mutatis mutandis in the event of a restructuring or significant reduction in the insured portfolio that fulfills the conditions for partial liquidation.

1. The cash flow statement is maintained according to the principles of closed cash accounting.

2. Generally, pension funds must be managed under the full capitalization system. For pension funds that have a state guarantee, the cash flow statement may permit funding of benefits under the partial capitalization system.

3. Pension funds under the contribution-based regime, which are managed under the partial capitalization system, credit the ordinary savings capital with the technical interest rate if their global coverage ratio exceeds 83.5%, at a maximum with the BVG minimum interest rate if it is between 80% and 83.5%, and with zero percent if it is below 80%.

4. Any available free funds according to the BVG may only be utilized by pension funds under full capitalization.

5. Funding must occur according to actuarial principles. It must ensure that benefits can be provided when due.

1. For pension schemes in the system of partial capitalization, a state guarantee must be in place for the following benefits, provided the initial coverage ratio as of January 1, 2012, is not undercut

a. Retirement, risk, and exit benefits,

b. Exit benefits of an insured population exiting in partial liquidation, and

c. Technical deficits resulting from a partial liquidation affecting the remaining insured population.

2. The automatic transition to the full capitalization system occurs when the coverage ratio is at least 116% and the other legal requirements for a sufficient fluctuation reserve are met. This eliminates the state guarantee.

3. The Government Council may grant a state guarantee for the pension scheme of the state sector and the pension schemes of those affiliated institutions in which the canton holds a 100% interest.

1. The pension fund assets are accumulated through contributions from employers and insured persons, vested benefits and buy-ins, income from investments, voluntary donations, and other revenues.

2. The assets for each pension scheme are reported separately.

3. Only the assets of a pension scheme are liable for its obligations. In schemes with a partial funding system, the guarantor is liable only up to the extent of the state guarantee.

4. The PKBS may finance its own costs and any additional expenses incurred in connection with its operations from the investment income.

1. The PKBS must include measures in the pension regulations if the funding ratio, as determined by federal legal provisions, falls below 100%.

2. If, for pension schemes in the partial capitalization system, the overall funding ratio (combining active members and pensioners) falls below 80% or if the funding ratio for active members (funding ratio after the pension obligations are fully covered) falls below their initial funding ratio according to Art. 72b BVG, remedial measures must be initiated.

1. Bodies of the PKBS are

a. the Board of Directors;

b. the Pension Commissions;

c. the Executive Management;

d. the Control Bodies.

1. The Management Board consists of 12 members. 6 employer representatives are appointed by the Government Council, and 6 employee representatives are elected by the insured persons in accordance with a special electoral regulation.

2. The Government Council ensures appropriate representation of the various employers. The electoral regulation must provide for adequate representation of the groups of insured persons.

3. The members of the Management Board must possess the necessary skills required for the performance of their duties, enjoy a good reputation, and at all times ensure proper management.

4. The Government Council ensures that in its selected representation, each gender is represented by at least one-third and strives to achieve the same representation in other areas.

5. The term of office is four years. Re-election is possible. In justified cases, the Government Council can dismiss individual or all appointed members within the term and replace them with new members.

6. The Management Board constitutes itself. It appoints a presidency, which consists of one member representing the employers and one member representing the insured persons.

1. The Board of Directors is the supreme body of the PKBS. It assumes overall management and ensures the fulfillment of duties in accordance with legal provisions. It determines the strategic goals and principles of the PKBS, as well as the means to achieve them, insofar as the legislature is not responsible. Furthermore, it ensures the financial stability of the PKBS and initiates the necessary measures, such as adjustments to the pension plan, in a timely manner. Additionally, it supervises the management of the PKBS.

2. The Board of Directors issues the regulations necessary for implementation, particularly concerning

a. pension provision,

b. asset management,

c. reserves and interest rules,

d. provisions in the event of partial liquidation,

e. tasks and organization,

f. the election and responsibilities of the pension committees, as well as

g. the rights and duties of the staff, while appropriately adhering to cantonal personnel law.

3. The Board of Directors also assumes the following tasks

a. the election of the auditing body,

b. the election of the expert for occupational pensions, and

c. the election of the management.

4. The Board of Directors may establish committees for the fulfillment of its duties. The members of these committees do not need to be members of the Board of Directors.

1. The Canton (area of State) and each affiliated employer are obligated to establish a pension commission composed equally of representatives of the employer and the employees.

2. The pension commissions shall exercise the rights and duties assigned to them by law, regulation, and affiliation agreement.

3. If no such commission can be appointed for a pension scheme, the board of directors shall assume this responsibility.

1. The Management Board conducts the ongoing business of the PKBS in accordance with statutory provisions and the instructions of the Board of Directors.

2. The composition and organization of the Management Board, as well as its duties and competencies, are determined by the Board of Directors of the PKBS through regulations.

1. For provident schemes, for which no new provident solution has been determined by the effective date of this law, the provident plan of the State sector applies with regard to the primacy, determination of the insured salary, amount of savings contributions, and risk benefits until such time as the prudential commission has set its new provident plan.

2. If the funding ratio (active members and retirees combined) for affiliates in the system of partial capitalization exceeds 80% as of January 1, 2012, the portion exceeding 80% will be earmarked as a fluctuation reserve to determine the initial funding ratio as of January 1, 2012.

3. For provident schemes guaranteed by the state, employees will contribute an additional 1.6% of the insured payroll, as defined in Art. 17 para. 2 lit. f of the Federal Act on the Free Movement of Persons (Libre Passage Act, LPA) of December 17, 1993, to strengthen the coverage ratio until the year 2024. The contribution of 5% of the insured salary sum from employers to the inflation fund will be used to strengthen the coverage ratio until it reaches 100%, but at least until December 31, 2024. If the inflation since January 1, 2010, exceeds 20%, starting from 2025, 2.5% of the insured salary will be paid into the inflation fund, and the contribution to strengthen the coverage ratio will be correspondingly reduced.

4. All insured persons of the provident schemes in the State sector and employers in which the canton holds a 100% stake, covered by the previous defined benefit plan and who are 25 years old or older at the time this law becomes effective, will be granted an acquisition of rights for the retirement pension insured under the previous ordinary retirement age. For calculating the retirement pension under the contribution-based scheme, the actuarial bases as of January 1, 2014, and a projection rate of 1.5% will be used. For insured persons with less than 38 years of contributions, this guarantee will be reduced by 1/38 for each missing year. For the purpose of determining the contribution years, the start of the provident relationship serving as the basis of the guarantee calculation is decisive. Contribution years from prior provident relationships will be credited if the contribution years were completed in the PKBS and the insured person is continuously insured by the PKBS.

5. For all insured persons of the provident schemes in the State sector and employers in which the canton holds a 100% stake, who are covered by the previous defined benefit plan and are 5 years or less before the previous ordinary retirement age at the time this law becomes effective, an acquisition of rights for the retirement pension insured under the previous ordinary retirement age is granted. For calculating the retirement pension under the contribution-based scheme, the actuarial bases valid at the time this law becomes effective and a projection rate of 1.5% will be used. For insured persons who are more than 5 years before the previous ordinary retirement age, this guarantee will be reduced by 20% for each missing year, so that it expires from 10 years onwards.

6. The higher acquisition of rights as per paragraphs 4 and 5 applies. The acquisition of rights is effected by a one-time deposit into the savings account and will be acquired over 10 years within the PKBS, but at the latest upon retirement. An amount already available in the savings account at the time this law becomes effective will not be used for the financing of this acquisition of rights.

7. For the provident schemes equipped with a state guarantee, the canton will make the one-time deposit for the acquisition of rights as per paragraph 6 on the first banking day after the effective date of this law. Acquisition of rights deposits not fully acquired will be credited to the employer contribution reserve.

8. All retirees managed in the State provident scheme, originating from a former employment relationship with BVB or IWB, will be transferred to the provident scheme of BVB or IWB at the time this law becomes effective, taking into account the technical bases of the PKBS applicable on January 1, 2013, and the prevailing funding ratio of the State provident scheme at the time this law becomes effective. The initial funding ratios as per paragraph 2 are to be determined as if this transfer had already occurred on January 1, 2013.

9. There is an acquisition of rights for pension benefits that commenced under the previous law. The periodic review of entitlement due to disability remains reserved. If incapacity for work occurred in the State sector or its affiliations connected to PKBS before the law takes effect, which leads to disability or death, the previous law applies.

10. The Board of Directors regulates the increase of the vested benefits for a retroactive salary adjustment prior to the effective date of this law. The employer covers the actuarially determined financing gap arising after deducting an employee's or employees’ back pay.

11. Prospective benefit claims related to ongoing pension benefits will be assessed under the regulation issued based on this law.

1. Personnel Act

The Personnel Act of November 17, 1999, is amended as follows

2. Law Regarding the Classification and Remuneration of Employees of the Canton of Basel-Stadt (Salary Law)

3. Pension Fund Act

The Law Regarding the Pension Fund Basel-Stadt (Pension Fund Act) of June 28, 2007, is repealed.