Alecta, Sweden’s biggest pension fund, announced it has beaten other competing providers in a tender put out by financial sector pension scheme FTP, to be reappointed as the scheme’s default provider.

Alecta said the agreement would take effect from 2021 and last for four years, with its defined contribution (DC) product, Alecta Optimal Pension, continuing to serve as default option in FTP’s FTP 1 and FTPK pension schemes.

The SEK1trn (€96bn) pension fund also said it was cutting the annual cost of Alecta Optimal Pension – a traditional guaranteed product – to 0.12% from 0.15%.

Magnus Billing, Alecta’s chief executive officer, said: “The fact that we have won the procurement shows the strength of our product – simple, with low fees and good conditions for returns.”

A spokesman for Alecta said the FTP scheme contract involved around 27,000 clients with some SEK2bn of pension savings.

The Swedish insurance sector employers’ organisation, FAO, said the award decision was made by the FTP supervisory board, the employer/union collective agreement groups FAO-Forena and FAO-Akavia and Sveriges Ingenjörer (the Swedish Association of Graduate Engineers).

West Midlands scheme invests in debt fund

West Midlands Pension Fund (WMPF) has invested in a newly-launched debt fund by alternative fund manager Frontier Development Capital (FDC) with the aim to support the growth of UK SMEs by mobilising private capital to increase the availability and flexibility of finance.

The £100m (€109m) debt fund achieved a first close of £75m – with commitments from WMPF and British Business Investments – and will be announcing its first deals within the coming weeks, FDC said.

The FDC Debt Fund supports small and medium sized businesses based in the UK that need flexibility in their funding structure, particularly in these uncertain times. The fund can provide loans of up to £7.5m to support trading businesses and property developers throughout the UK.

Jill Davys, assistant director, investments, at WMPF, said: “West Midlands Pension Fund is delighted to be supporting FDC in providing funding to regional SMEs at this critical time for the economy, whilst also delivering on the broader aspiration of the fund to support local businesses and the local economy, delivering dual benefit of providing a competitive return to support meeting the fund’s investment return.”

He added that this latest investment with FDC follows on from previous investments made by WMPF which have helped “not only deliver the financial returns the fund needs to pay pensions but also supported growth in the local regional economy.”

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