The Swedish banking industry pension fund SPK reported an 11.6% return on investments for 2020, up from 8.4% the year before, with its CEO saying portfolio and strategy work undertaken in recent years has put the fund on a better footing for future investment performance.
SPK said on its website that 2020 had been one of its best years ever in terms of total return, adding that it has also strengthened its consolidation.
On the back of the strong return, the pension fund said it was increasing the bonus rate for the defined contribution pension product SPK Individual to 6% from 1 February – the highest level since 2015.
Lars-Åke Vikberg, chief executive officer of the Stockholm-based pension fund, said: “There are mainly three reasons for the successful result.”
He said SPK started work on reviewing the portfolio in 2019 so that it would fit in with the new occupational pension regulations, IORP II, in a longer perspective.
“This meant, among other things, that we removed some funds that did not perform or fit into the new strategy,” he told IPE.
Secondly, he said, at the beginning of April, the team began to increase the proportion of shares and changed the allocation within shares, which he said had contributed positively to the result for the year.
“Thirdly, our managers have outperformed their benchmarks across almost the entire line,” Vikberg said.
Asked whether the pension fund had created a better foundation for investment performance in 2021 with the work it had done, he said:
“Yes, I definitely think so. But one must not forget that pension management is a marathon.
“Our goal is for us to have a good long-term return and the changes we have made will definitely give us the opportunity to achieve that,” Vikberg said.
Vikberg said SPK was still implementing its strategy, so some further changes were underway, but he declined to say any more about this.
The pension fund reported a solvency ratio of 12.2 for December 2020, up from 7.4 at the end of 2019, according to preliminary figures.
SPK received approval from the Swedish FSA in December of its application to become an occupational pension company under Sweden’s version of the EU’s IORP II directive.
Refecting the change of status, from 1 January, the pension fund has been operating under the new name SPK Pension Tjänstepensionsförening.