Swedish DIY retail chain Jula has established an in-house pension scheme for the first time, offering staff under the white-collar ITP 1 collective agreement a pensions option which, it says, will give them at least the same return as that produced by Alecta’s default option.
The privately-held company said consultancy Intelligencia helped it with the project, with Nordea having been chosen to provide investment services for the newly created pension foundation under the Jula name.
Ola Helgesson, Jula’s chief financial officer, told IPE the idea of setting up an ITP 1 pension scheme under the company’s own auspices had originated from Intelligencia.
“After studying the proposal more closely, we saw that this could be a win-win solution for both the company and the individuals, both in the form of higher pensions and, in the long term, lower costs for the group,” said the CFO of the group, which has expanded into sectors such as hotels and logistics.
An increasing number of employees at Jula group companies were now covered by ITP 1, he said, with the group now having reached a level in terms of staff numbers where it was advantageous to offer an in-house plan that was better than the regular ITP 1 provision.
“Employees covered by ITP 1 have many years left until retirement, which gives them the conditions to get a good return over a longer time horizon,” he said.
“The impact of good returns over many years makes a big difference on the day it’s time to retire,” he said.
“By collecting Jula’s pension premiums for ITP 1 in a foundation with professional management, we’re creating the conditions for a higher return compared to the standard choice – Alecta Optimal Pension,” said Helgesson.
Jula said the Skara-headquartered company had worked hard to communicate the new pension option to staff, before it was launched on 1 May this year.
In conjunction with Joakim Grundberg and Lennart Bengtsson of Intelligencia, the group held several information meetings, both in person, and digitally, the CFO said.
Some 350 Jula staff – which total around 4,000 – are now being offered the option of ITP 1 run by the company itself.
However, Helgesson said the company was also hoping to be able to find a corresponding solution for the employees within the blue-collar SAF-LO collective agreement.
To do so was “unbroken ground” so far, he said, but added that Jula saw great opportunities for self-managed pensions in that area as well.
Employees who choose Jula’s ITP 1 plan are guaranteed at least the same return as Alecta Optimal Pension, but may also share in the foundation’s excess return, he said, adding that there were no risks to employees, only benefits.
As things stand, the default option within ITP 1 is traditional insurance with Sweden’s biggest pension fund Alecta, but like other staff nationwide within the scheme, Jula employees can also choose other selectable pension companies.
“Jula ITP 1 is completely unique and only selectable for Jula’s employees,” Helgesson said.
PRI Pensionsgaranti, the Swedish insurance institution that provides services for company pension schemes, is handling the pensions administration.
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