Sweden’s biggest pension fund, Alecta, has won a new five-year contract as default provider in the country’s financial sector occupational pension scheme for traditional, or with-profits, pensions.
The SEK1.31trn (€115bn) pensions firm, which is still being probed by the Swedish FSA regarding large failed investments, said the award signified “renewed confidence” in it.
The FTP committee – which makes decisions on the financial sector occupational pension scheme on behalf of collective-bargaining parties including employers’ association FAO – made the award following a competitive tender process, according to an announcement by FAO today.
The panel picked Alecta as the default choice for defined contribution (DC) pensions in the FTP plan – for FTP1 and FTPK within FTP2 – meaning scheme members making no active choice will have contributions directed into traditional pension insurance provided by Alecta.
Fredrik Palm, head of product and analysis at Alecta, said: “The fact that we have received renewed confidence as a default in the FTP plan is proof that we have a very good product, which, in addition to low fees, can create a competitive return and has a well-balanced guarantee level.”
He said the product also had “unique features that reduce the volatility of pension amounts before and during payment”.
Alecta said it was reducing the fee on its Alecta Optimal Pension product to 0.09% from 0.10%, while maintaining the current fee ceiling at SEK480 a year.
Last time Alecta won the FTP contract, back in 2020, the fee was 0.12%.
Alecta told IPE there were around 24,000 individual clients in the DC FTP scheme, and total savings of SEK4.5bn (€396m).
With the award of the latest FTP contract, the mandate period has also been extended to five years from the previous four-year term, FAO said.
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