KPA Livförsäkring – part of the Swedish municipal pension provider KPA Pension – has decided at an extraordinary general meeting to change its status in order to be regulated under Sweden’s version of the EU’s IORP II directive.
The life and pensions unit announced its owners had approved the idea of converting to become an occupational pension company (tjänstepensionsföretag) in accordance with the IORP II regulatory regime.
A number of Swedish pension providers which would otherwise be subject to the Solvency II capital requirements meant for insurers have applied for IORP II conversion since the beginning of the year.
Anders Henriksson, chair of the board of KPA Livförsäkring, said: “The new occupational pension regulation is better adapted for occupational pensions based on collective agreements, and where the parties to the collective agreement are given greater opportunities for influence and transparency.”
At Thursday’s meeting, it was also decided to change the entity’s name to KPA Tjänstepension with effect from 1 January, 2021, the firm said.
“By adapting KPA Livförsäkring AB to the regulations at an early stage, we ensure that our customers in municipalities and regions get the best conditions for creating a safe and good pension,” Henriksson said.
Meanwhile, Johan Sjöström, KPA Livförsäkring’s chief executive officer, said the transformation of the firm’s regulatory status would strengthen conditions for a long-term good return on capital for its customers, which consist of municipalities, regions and municipal companies.
The move would also allow the unit to remain cost-effective and have low costs, he added.
KPA Livförsäkring, which has around SEK4.6bn (€436m) of investment assets, is part of KPA Pension, alongside the larger entity KPA Pensionsförsäkring with SEK210.1bn of assets.
In turn, KPA Pension is owned by pensions and insurance company Folksam and the Swedish Association of Local Authorities and Regions.
Folksam itself is currently analysing whether or not to apply to convert any of its business to the new IORP II status, a spokeswoman for the company told IPE in response to a question.
Back in May, Folksam’s CEO Ylva Wessén spoke out about the tax consequences of the new IORP II regime, calling on the government to close inequalities between mutual providers and public-limited firms that the legislation had created.
She said that as it stood, the new law meant occupational pension providers creating a separate occupational pension company would incur huge taxes when they transferred pension assets internally.