New Pension Plan for Zurich Employees in Switzerland

Zurich, June 17, 2005 – The Boards of Trustees of the pension funds for the employees of Zurich Insurance Company (Zurich) in Switzerland have adopted new pension plan arrangements that reflect the changed economic and demographic environment. The new plans will become effective on January 1, 2006.

Under the new plans, Zurich employees in Switzerland will participate in autonomous pension plans based on a defined contribution approach. The current pension plans are based on group insurance contracts with Zurich Life and provide defined pension benefits relating to final salary.

All employees will transfer to the new arrangements and future benefits at normal retirement for the current active participants are targeted to be similar to those under the present arrangements. However, following a transition period of three years, the current additional benefits that are provided on early retirement will gradually be phased out over a nine-year period. 

Following additional financing on a statutory basis, the initial funding ratio in the plans is estimated to be approximately 110%. The transition to the new pension plans including the additional funding will have no adverse impact on the Group’s IFRS net income.