KLP, Norway’s biggest municipal pensions provider, said it is now scrutinising the rejection of a complaint it made about a recent local authority tender that the pension fund lost, and may decide to take the dispute further.
The Oslo-headquartered mutual pensions firm, which has group assets under management of NOK786bn (€71.3bn), said it received an answer yesterday morning from Vestland County Municipality to the formal objection KLP had lodged with the authority last month.
Marianne Sevaldsen, executive vice president for KLP’s life insurance operation, told IPE: “They have not taken our complaint further.
“We will now go through their answer properly, before we decide if and how we may take this further,” she said.
In mid-October, KLP told Vestland it was unhappy about the way the local authority had tendered the public-sector pension contract.
The competitive process had resulted in KLP – by far the market leader in municipal pensions provision in Norway – losing business to its rival Storebrand.
Storebrand is now actively seeking pensions contracts from local authorities since market conditions became more conducive to competition because of a newly-designed public sector pension scheme.
It greeted the Vestland contract gain at the beginning of October as its first municipal pension scheme win in the financial services group’s new business drive.
The Vestland pension scheme has 11,000 active and retired members, and NOK3.7bn in assets under management.
KLP has said it made the complaint because it believed it was a violation of the procurement regulations for the alternative return on equity to be set after the offer deadline.
The setting of the alternative return on equity relates to the comparability of returns from different types of pension provider.
Having received notice yesterday that the local authority would not take the complaint further, Sevaldsen said: “What is important for us is to make sure that the process is orderly and proper, which will ensure the basis for the customer’s decision basis and that the best offer wins.”
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