Three new providers enter Sweden’s ITP system
SWEDEN - Danica, Handelsbanken and Nordea have been selected as the new fund providers for Sweden's ITP occupational pension system for white-collar workers, for three years starting 1 July.
Swedish bank and asset manager SEB and AMF, the pension provider, are the only two previous providers to have survived this tender process.
Moderna Liv & Pension, Länsförsäkringar and Swedbank are no longer on the roster while applicants such as SPP and Skandia were not successful either.
From long list of 22 companies compiled by Collectum, 11 companies filed applications to manage the assets of some 1.3 million members.
Members who invested with companies no longer eligible to provide pensions via ITP will have to choose a new provider. And those who do not make a selection within the ITP system will have their assets managed by Alecta, in a traditional insurance product rather than a fund solution, according to officials.
Collectum said the goal is to offer members as high a pension as possible through low fees and high returns.
According to a study produced by Morningstar but commissioned by Collectum, the tender process revealed fees are lower than in 2007 but the companies selected at the same time have higher average Morningstar ratings. The report claimed this, on average, this translates to a 10% increase of capital.
Anders Moberg, chief executive of Collectum, said he was very satisfied with the tender process. "Lower fees and higher rating of the funds makes higher pensions feasible," he said.
The Morningstar report also showed there was a marked difference of 102% between the regular fees of the providers compared to those offered within ITP.
Moberg said he is pleased fees had come down by 44% since the initial tender process in 2007 while fund ratings for providers within the system had also increased from 3.26 to 4.1.
The ITP system also offers its members the opportunity to select a traditional insurance solution, rather than a fund solution. However, there was no tender process for the traditional insurance providers.
The providers of traditional insurance solutions - aside from Alecta which is a permanent default option for those who fail to make an active choice - are AMF, Länsförsäkringar, Nordea and Skandia.
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