DENMARK - ATP, the giant Danish pension fund and administrator, has pulled out of the bid to administer the UK's personal accounts scheme, saying it was unhappy with the risk/return balance of the potential new business and the number of likely participants.
ATP - the labour market supplementary pension scheme with around DKK400bn (€53.73bn) under management - confirmed that it had withdrawn from the bid in late September.
"The main reason for the withdrawal was commercial," said Chresten Dengsøe, ATP's chief actuarial officer. "We viewed this as an investment for ATP, so we were looking at the risk and the return. It seems that the risk was too high compared with the return. It was about how we should share this risk between the authority and the provider."
The likely number of people participating in the personal accounts system was uncertain, and as a completely new operation, the range was quite broad, said Dengsøe.
"We were not able to reach agreement on how to share this uncertainty," he said.
The Personal Accounts Delivery Authority (PADA), which started its procurement process in January, explained in a statement that it had completed its evaluation of the Pre-Qualification Questionnaires in April and invited short-listed suppliers to take part in competitive dialogue - the next stage of the procurement process.
"The competitive dialogue process has been underway for over four months and is going well," it said. Suppliers taking part at that time were ATP, Great-West Retirement Services (Europe) (with Great-West Life and Annuity Insurance Company and Canada Life Group (UK) Ltd, Logica UK and Tata Consultancy Services, it said.
According to PADA, ATP's withdrawal was "due to a decision that, following our discussions on the detailed requirements, providing services for the personal accounts scheme does not fit with their commercial model."
It added the competitive dialogue process was going well with other bidders. PADA has previously said it does not expect to sign a contract with the successful bidder until June 2010. (See earlier IPE story: ATP heads up personal accounts admin shortlist)
Dengsøe stressed that ATP's decision was purely based on commercial considerations related to this bid, and did not signify any strategic decision. "It doesn't mean we won't go outside Denmark in the future," he said.
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