SWEDEN - Collectum, responsible for pooling money within Sweden's white-collar pension scheme ITP, has chosen eight managers for its new defined contribution plan.
AMF Pension, Länsförsäkringar, Nordea Liv & Pension, Skandia Liv, Moderna Försäkringar, SEB Trygg Liv, Swedbank Försäkring were chosen to manage an initial SEK4bn (€440m) in premium income in the first year.
Out of those eight AMF and Länsförsäkringar were chosen for both parts of the tender, that is to manage the main part of the pension assets and to offer a second fund product.
Under the new defined contribution arrangements within the ITP scheme, 50% of employer contributions are put into guaranteed insurance products and for the other 50% employees can choose among unit-linked insurance products.
As reported by IPE at the end of last month, the Swedish industry was anxious for Collectum to choose as many managers as possible in order "to create a more competitive environment", as Nordea Life CEO Britta Burreau put it.
Once the DC scheme, which applies to white-collar employees born after 1978, becomes fully functional in a few decades, it will generate flows of SEK20-25bn.
Until recently Alecta held a monopoly in managing the SEK20bn a year mandate under the old ITP defined benefit plan for employees born in 1978 and before. However, SAS announced to withdraw SEK7bn in assets for its pilot pension fund last month.
Meanwhile, AMF reported that its return for 2006 dropped to 9.6% in 2006 from a record 16% in 2005.
However, the pension provider did better than its Swedish competitors, who returned 8.3% on average, down from 13.2%.
Elsewhere, the Swedish buffer fund AP3 reported that its listed portfolio underperformed its benchmark in 2006 by 0.2 percentage points.
The fund's capital rose by SEK20.2bn to SEK212.2bn returning 9.5% after expenses. AP3's annual return since inception in 2001 now stands at 5.7%.
"AP3's active medium-term allocation strategy made a positive contribution to net profit, primarily by reducing exposure to foreign currency risk," the fund said in a statement.
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