Following last week’s decision by one Norwegian local council to put its pension out to tender – though another opted for the status quo – the man leading Storebrand’s push in the sector said he expects more municipalities to follow suit.
Jon Hippe, head of public sector at Storebrand, told IPE: “Bjørnafjorden have now made their decision and we expect one or two more communities to put their schemes out to tender.”
Councillors in Bjørnafjorden in western Norway took a decision last Thursday, according to specialist news service Kommunal Rapport, to put the municipality’s pensions management out to tender, which is currently in the hands of the country’s main municipal pensions provider KLP.
Storebrand re-entered the municipal pensions market last year after several years of absence – a business move which has helped open up competition in a sector almost monopolised by KLP.
“We expect to see three to five [tender] processes this year,” Hippe said, adding: “I would guess a total of NOK4bn (€393m) to NOK6bn in AUM.”
“Bjørnafjorden and other communities are now deciding to put out their pension schemes out to tender,” he said.
“It clearly shows for many communities across the country the possible economic gains they can achieve if they follow in the footsteps of Bjørnafjorden,” Hippe said.
“And, possibly this is contributing to an opening of the municipal pension market in Norway and hence, increased activity in 2022,” he said.
Though a newcomer, Storebrand now has the municipalities of both Askøy and Vestland as pension customers.
Alongside these, Hippe said the firm’s customers also include more than 40 companies with public pension arrangements, including theaters, museums and other cultural institutions.
Tender processes were currently in progress in the municipalities of Øygarden and Ullensvang, he said.
However Kommunal Rapport has reported that the municipality of Ålesund, which had been considering tendering for pensions management this year, decided on Thursday not to launch a public procurement process after all.