Alecta’s huge recent losses on US bank assets have clouded the Swedish pension giant’s victory in winning a new five-year mandate as the default provider of the country’s white-collar occupational pension scheme.

Pensions administration organisation Collectum yesterday declared Alecta would continue as the default provider of traditional pension insurance for private-sector employees in the ITP scheme for a further five years.

“Regardless of whether you look back five, 10 or 15 years, Alecta has the best total return. Alecta’s product is also expected to provide the highest pension payout at the lowest fee,” Collectum said in a statement.

Staffan Ström, pension economist at Alecta, said of the win: “The fact that we have received an extension of confidence shows the strength of our defined-contribution product Alecta Optimal Pension and the tender we submitted.”

Ström said Alecta was now pushing the fee down further to 0.05% from 0.09%, and lowering the fee ceiling to SEK480 a year from SEK600.

Collectum also announced the five pension firms which had won contracts to provide traditional insurance options in the ITP scheme, and the five which it selected to provide fund insurance options within the scheme.

Alecta, AMF, Folksam, Norde and SPP were picked as traditional insurance providers and Handelsbanken, Länsförsäkringar, Nordea, SPP and Swedbank were chosen to offer fund insurance, or unit-link products.

However, Collectum, which carries out the procurement of occupational pension providers on behalf of the Swedish Confederation of Enterprise and PTK, the trade unions’ Council for Negotiation and Cooperation, also issued a warning about Alecta’s US bank loss scandal.

Pehr Östberg, head of procurement at Collectum, said: “Even though Alecta was overall the best in the evaluation we made, we cannot ignore the recent events at the company.

“Therefore, it is important to point out that the ITP committee always has the opportunity to reconsider an award,” he said.

This could happen, for example, he said, if the Financial Supervisory Authority intervened in a selected company.

“We will continue to follow Alecta’s actions closely,” Östberg said.

A fortnight ago, Alecta’s non-executive board ordered an immediate internal investigation into how major losses on US bank investments were able to happen, and the SEK1.2trn (€105bn) Stockholm-based pensions institution said conclusions from the probe would be made public.

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