The board of ABB Sweden has de-cided to establish a fund for cashing in approximately Skr3bn ($xxbn) in pension liabilities in the ITP defined benefit (DB) scheme.

Pensions are currently administered in a reserve system which makes the liabilities continuously grow on the balance sheet. By shifting liabilities to a fund, ABB hopes to increase returns and be able to use surpluses for premature retirements outside the collective pensions plan.

ABB Sweden plans to have various fund managers to manage the capital in the fund which is planned to be in operation in the first quarter of 1998.

The pension obligations remain in the company, the pensions scheme is still a DB system.

Electrolux has reached the same decision and will start a fund for ITP liabilities in 1998. The Electrolux liabilities amount for about Skr1bn but group treasurer Matts Ekman points out that it is yet undecided whether the whole amount is going to be lifted from the company´s balance sheet. Mikael Nyman

Topics