SWEDEN - The pension companies' capital buffer continues to decline but it is still at 'satisfactory' levels, Finansinspektionen (FI) claims.
However, it added, since the turn of the year, the long-term interest rates had risen and this represented a favourable factor for the pension companies.
According to FI's findings, three occupational pension funds were reporting a red light in the traffic-light model, the supervisory tool used by the watchdog.
These pension companies account for approximately 2% of the total pension market.
FI said the companies had the capital required by law and the guaranteed pension payments were not threatened - and added it was in contact with these companies in order to ensure that they can manage their risks.
It explained the traffic light model was a supervisory tool and not a formal regulatory regime.
It aims to identify companies that have large exposures against financial risks and insurance risks in relation to their capital, it added.
The objective for FI is to identify at an early stage companies that have such high levels of risk exposure that they cannot with sufficient security fulfill their commitments to customers.
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Royal Bank of Scotland (RBS) faces a £102m impact on liabilities as a result of equalising guaranteed minimum pensions (GMPs), according to its annual results.
Malcolm Mclean says getting the channels of communication right and engaging more openly is a good starting point