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Kåpan keeps solvency stable despite liabilities uprating

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Solvency levels at Sweden’s Kåpan, which manages defined contribution pensions for public sector employees, remained broadly stable during the first half of the year as strong yields managed to offset its pension obligations revaluation, the mutual provider said.

The solvency ratio stood at 151% at the end of June, down marginally from 153% at then end of December.

In its interim report, Kåpan said: “The good yields have been able to offset the effect of the association’s pension obligations being valued upwards because of the lower levels of long-term interest rates.”

The total monthly bonuses for the first six months amounted to 7.5%, after which the funding ratio stood at 100%, Kåpan said, adding that this matched the organisation’s target level.

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The funding ratio was 108% at the end of June 2013.

Kåpan pointed out that a decision had been made in April 2013 to change the bonus payment rules so that bonuses are paid monthly in arrears instead of yearly.

The investment return for the first half was 5.9%, up from 2.3% in the first half of 2013.

Total assets rose to SEK65.23bn (€713m) from SEK60.26bn at the end of December.

Meanwhile, Swedish occupational pensions provider Alecta said its defined contribution pension scheme — Alecta Optimal Pension — produced a 7.5% return on investments between January and June this year, up from 5.5% in the corresponding period last year.

Alecta’s defined benefit pension product gave a 6.3% return compared with 2.7% in the first half of 2013.

Solvency was little changed, dipping to 164% from 165%, according to the company’s interim figures.

Assets under management rose to SEK642bn.

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