Reimbursement of advance payments by the pension fund liable for benefits with interest on damages

Facts

A., born in 1962, was insured for occupational pension benefits with the Pension Fund of the City of Zurich (PK Stadt Zürich). After A. had applied for disability benefits, the Substitute Occupational Benefit Institution (Auffangeinrichtung) as the institution liable for advance payments provided the statutory advance payments. The PK Stadt Zürich rejected the payment of disability benefits.

The Substitute Occupational Benefit Institution filed a lawsuit against the PK Stadt Zürich and requested that it reimburse the advance payments made, including interest. The Social Insurance Court of the Canton of Zurich obliged the PK Stadt Zürich to reimburse the advance payments made since March 20, 2015, but rejected the payment of default interest and the accrual of interest on the advance payments.

The Substitute Occupational Benefit Institution filed an administrative law appeal with the Federal Supreme Court.

Considerations

The Federal Supreme Court concluded that the PK Stadt Zürich is obliged to reimburse the advance payments made by the Substitute Occupational Benefit Institution in accordance with Art. 26 para. 4 BVG. The institution liable for the advance payments is entitled to interest on damages.

The Federal Supreme Court distinguished between default interest and interest on damages. While default interest is not owed, the Substitute Occupational Benefit Institution as the institution liable for the advance payments is entitled to interest on…