Swedish pensions behemoth Alecta will not lose the main contract behind its market dominance, despite being fined for serious risk control failings, it has now been confirmed.
After its deliberations the ITP Committee, which governs the ITP scheme for privately-employed salaried employees, has decided Alecta’s mandate as the default provider for traditional insurance within the scheme should not be terminated, it was announced last week.
The employer and trade union parties to the collective bargaining agreement underlying the ITP scheme said: “In its decision, FI [Finansinspektionen, the Swedish Financial Supervisory Authority] assesses that the prognosis for Alecta to continue to comply with the applicable regulations is good.”
“The ITP Committee sees no reason to make any other assessment than FI,” employers’ organisation the Confederation of Swedish Enterprise (Svenskt Näringsliv) and private-sector employees trade union organisation PTK said.
Since mid-March, the committee has been considering whether Alecta’s role in the ITP system should be affected by FI’s decision to fine Alecta SEK50m (€4.6m) and give it a warning for failings over its high-profile loss-making investment in residential property firm Heimstaden Bostad.
The financial watchdog’s censure put the ITP Committee in a difficult position because Alecta is the main ITP provider, and also because the relationship between Collectum – the administrative body for the ITP scheme that also serves as the secretariat for the ITP Committee – the social partners and Alecta is a historically close one.
PTK said on Thursday that if a procured company is subject to intervention by FI, the administration agreement could be terminated.
“FI’s investigation shows that Alecta failed in its risk control,” the trade union organisation noted, adding: “The ITP Committee believes that the deficiencies that prompted FI’s intervention are serious.”
However, it said: “At the same time, the ITP Committee can state, just as FI has stated, that Alecta has worked purposefully to identify and address the shortcomings in its operations.”
PTK cited FI’s assessment that the prognosis for Alecta to continue to comply with the applicable regulations was good.
“The ITP Committee sees no reason to make any other assessment than FI,” it stated, adding that the panel also did not see that Alecta’s ability to deliver good pensions according to the assignment had been affected.
Asked for comment, a spokesman for Alecta told IPE: “We are happy to continue to have confidence as a default option”, adding that the SEK1.4trn institution had no other comments regarding the decision made by the ITP committee.
The commitee’s decision arguably means Alecta has now avoided the most far-reaching potential consequence of the 2023 investments scandal that chief executive officer Peder Hasslev was brought in to deal with.
