Norwegian financial services group Storebrand has been picked to manage the municipal pension scheme in Norway’s Vestland region, trumping the country’s main provider of municipal pensions KLP, which currently manages the pension scheme for the region’s public-sector staff.
The scheme has 11,000 active and retired members, and a total of NOK3.7bn (€340m) in assets under management, according to Storebrand.
Vestland County Council – a municipality formed in January from the merger of two former counties Sogn og Fjordane and Hordaland – decided the result of the tender on Wednesday.
“Offers were received from two professional players, KLP and Storebrand, where Storebrand, after a thorough overall assessment, received the highest score,” the local authority said.
The contract for the management and administration of Vestland county municipality’s pension scheme had been awarded to Storebrand for the years 2021-2022, with an option for another “1+1” years, the council said.
Storebrand said Vestland had become the first player to move its pension scheme from KLP to Storebrand, after Storebrand challenged KLP last year on municipal pensions.
Odd Arild Grefstad, Storebrand’s chief executive officer, said: “This is an important milestone for us at Storebrand, and we are pleased that Vestland County Council can now have its pension costs reduced.”
Jon Hippe, head of public sector at Storebrand, said Vestland was paving the way for other municipalities with the decision.
“This process shows it is important to put the scheme out to tender in order to contribute to competition about which pension provider can offer the most economically-favourable scheme,” he said.
Hippe said that now being able to choose between several players was a great advantage for the municipalities.
KLP has dominated Norway’s municipal pensions market since Storebrand and DNB Liv left the sector several years ago, but with competitive conditions changing as a result of Norway’s municipal reform and the introduction of the new hybrid public sector pension scheme, the two companies have since re-entered the market.
However, in its interim report at the end of August, KLP said that so far, the municipal and regional reforms had only had a moderate impact on its customer base.
The transfer of the Vestland pension scheme from KLP is due to happen at the end of this year, with the employees’ pension rights remaining unchanged, according to Storebrand.