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Sweden’s Alecta ahead of schedule on cost cuts

SWEDEN – Occupational pensions provider Alecta says its planned cost measures are going better than planned – and that it achieved a total return of 6.3% in the first nine months of 2004.

“In the first nine months of this year we have succeeded in reaching a total return that is above the industry average,” said chief executive – and former head of buffer scheme AP3 - Tomas Nicolin.

“We have achieved this excellent return despite a comparatively low proportion of equities which means that the risk in Alecta’s portfolio is lower than for many other Swedish life insurance companies.”

He added: “On the costs side we continue to be highly alert. Our client companies will be pleased to know that Alecta’s costs are decreasing faster than planned.

“Our goal, to achieve costs for our day-to-day business of less than one billion crowns, looks like being realised before the date set at the end of 2005.”

He said that its collective funding ratio as of September 30 was 126%.

Alecta it said that from 2006 its administration arm Collectum would be an independent company owned by the Confederation of Swedish Enterprise and the Federation of Salaried Employees in Industry and Services (PTK).

It said: “A more independent Collectum will mark a further step towards making the ITP Plan more exposed to competition.”

In September Alecta named Anders Moberg as president of the unit, which is an administration arm for the ITP, the supplementary pension for salaried employees in the private sector.

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