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AMF's problems grow over executive pensions

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  • AMF's problems grow over executive pensions

SWEDEN - The board of AMF Pension, the Swedish pensions provider, claims it has been misled about the size of the pension its former chief executive Christer Elmehagen should have received and is demanding over SEK24m (€2.18m) be repaid to the firm.

AMF was forced to ask its auditors Ernst & Young to conduct an investigation into pension payments made to senior executives after it recently found the deputy CEO, Ingvar Skeberg had transferred his own pension capital ahead of a dividends cut in February. (See earlier IPE story

While the practice is understood to be legal, the new chief executive, Ingrid Bonde, and her board of directors are taking a hard line on the matter and consider it unethical to carry out such practices, so Skeberg was ousted. (See earlier IPE article: AMF Pension sacks deputy CEO)

That investigation has now found Elmehagen also used insider information and moved his pension ahead of key announcements - as Skeberg had done - but in turn found he had received a higher pension than even the board was aware of, according to AMF.

More specifically, the review is said to have found the pension he earned was "too large and is not consistent with the employment contract intentions", though how he came to be paid too much is now the subject of a fresh internal investigation due by the end of next week.

"The Board takes very seriously what has happened and how it affects the confidence of savers at AMF. AMF is a very well-run company and it is my firm view that the recent events relate to individuals and do not reflect AMF's values," claimed Göran Tunhammar, chairman of the board.

A statement from the firm suggests Elmehagen's pension arrangements were the "right decision for the CEO's compensation and benefits" but the review found Elehagen's pension had not been "handled and documented in a sufficiently clear manner".

The AMF board is now understood to be discussing the matter with Elmehagen through an intermediary.

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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