SWEDEN - Negotiations have begun over a new ITP agreement that could have far-reaching consequences for the SEK 380bn occupational pensions firm Alecta.
The talks - between the Confederation of Swedish Enterpriser and the Federation of Salaried Employees in Industry and Services - could see the firm opened up to competition, said Alecta president Tomas Nicolin (pictured).
Alecta handles the major part of the ITP occupational pension plan on assignment from the Confederation of Swedish Enterprise and the Federation of Salaried Employees in Industry and Services.
“If this is the final result, it will mean considerable changes for Alecta and our customers. We will, of course, continue to manage the old ITP Plan for a long time at the same time as taking advantage of the opportunities in a new plan.”
Speaking about the possibility of individuals having a greater choice of pension provider, Nicolin said Alecta was well-positioned for any market change.
“I believe that there are three factors that should prove decisive when individuals make their choice. These are the pension provider’s ability to create returns, financial position and costs. A five-year return that is clearly above the industry average, strong funding and the lowest costs in the industry, puts us in a good starting position.”
The criteria for negotiations also include a DC plan, which, said Nicolin, means that risk of investment loss is borne by the insured individuals instead of by the companies, as in the present plan.
“When in the future an individual chooses a pension provider, as I see it there are three factors that should be decisive. Firstly, the supplier’s financial position, secondly the ability to create returns and thirdly costs.”
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