SFE tenders for pension provider but mulls own fund
NORWAY - Sogn og Fjordane Energi AS (SFE), the Norwegian energy company, is re-tendering for a pension provider for its defined benefit (DB) occupational scheme, but is considering the possibility of joining with other energy companies to establish their own pension investment fund.
The NOK 180m (€21.6m) pension scheme currently employs KLP to provide its occupational pension scheme, however because it is part of the Norwegian Association of Local and Regional Authorities', only three insurance companies can provide the pension services within these rules - the other two being Storebrand and Vital.
Asgeir Sveen, marketing director at Factor Insurance Brokers, which organised the tender, pointed out that because of the special rules for the scheme, similar to some government pension schemes, SFE cannot decide where to specifically invest its pension assets as it is limited by the funds offered by the insurance company.
"SFE are thinking of creating its own small pension investment vehicle," said Sveen. "Joint efforts with other companies in the energy sector are a possibility, and thus a possibility to decide how their assets should be invested in the future."
Sveen pointed out, however, that a lot of work will be involved in the analysis of such a joint venture, so any further developments are unlikely before the end of the year.
In the meantime, the tender for the provision of the occupational scheme is for a period of three to five years, although under the rules for this type of insurance the scheme can stop the contract every year on 1 January if they so wish, albeit Sveen noted this is unusual tas each tender process takes a lot of work.
The closing date for applications for the tender is 10 November 2009 and further information can be obtained from Factor Insurance Brokers.
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