(Corrects typographical error in headline) SWEDEN – Telecoms equipment firm Telefonaktiebolaget LM Ericsson says its board of directors has decided to capitalize a Swedish pension trust with SEK8.5bn (E950m).
It said: “Ericsson will capitalize the Swedish pension trust it has established for the management of pension funds related to the obligations under the Swedish ITP pension plan.”
It added the board has resolved to transfer around SEK 8.5bn of “cash or cash equivalents into the trust” – which was established in the autumn this year and which will be capitalized during January 2005.
“The objective of the trust will be to diligently manage entrusted funds for the purpose of covering the pension obligations under the particular pension plan.”
"By creating a separated pension trust we will reduce costs, create financial flexibility and a more adequate balance sheet, easier to analyze in line with international practice," said chief financial officer Karl-Henrik Sundström.
Currently the pension liability is reported as provisions in the
group balance sheet. When the trust has been capitalized, these provisions will be offset by the trust's assets.
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