SWEDEN – A new ITP defined contribution plan for white-collar workers is due to come into effect from 1 January 2007.

The move – based on costs - involves shutting the old defined benefit ITP plan to new members, and decreasing the entry age from 28 to 25.

“Everyone 28 and older will stay in the old plan,” said a spokesperson for the PTK, the Federation of Salaried Employees. The PTK and the Confederation of Swedish Enterprise agreed to the shift after 12 years’ of negotiations. There will be a 40-year transition period.

“Yes, we do support the new ITP plan. We are quite satisfied with the new agreement,” said the spokesperson. “It’s a good agreement for both parties.”

PTK is a confederation of 27 unions, and 26 have agreed to the new plan. Only one union has “a small objection in one detail”.

“They will associate to the agreement, I’m sure of that,” said the spokesperson.

PTK dismissed suggestions that the €40bn occupational pensions firm Alecta would have to fight to retain business because the new scheme will be opened up to competition.

“During that time, Alecta will take care of the old pension plan and will also deliver some parts of the new plan. “So, I’m sure Alecta has a good future,” he said.

According to commentators, between three and five providers will be selected for the new scheme, managed by ITP administrator, Collectum.

“I’m sure Alecta – a big insurance company – will be in the first role,” said PTK.

“PTK and the Confederation of Swedish Enterprise - we are the hands of Alecta insurance company, so will take care of Alecta, I’m sure of that.”