Swedish construction group Skanska has transferred more than SEK2bn (e239bn) from its balance sheet into a new pensions foundation investing in the Swedish and international stock markets.
The ITP-type pension foundation came into operation during the summer and is invested on a 60/40 bonds/equity basis, according to Birgitta Jonsson, benefits manager for the group in Stockholm. “One reason for the shift was that the company had a strong balance sheet.” This, she says, enabled the company to take the pensions money away from the former book reserve arrangement. “There were also some tax advantages to be made,” she adds.
Noting that the assets would be predominantly invested in Sweden with a smattering of overseas securities, Jonsson declined to disclose the name of the foundation’s money manager.
Pharmaceutical multinational Astra Zeneca has also revealed plans to investigate the creation of a foundation, which could see around SEK2bn in assets switched from the company books.
Michael Runnakko, director European pensions at Astra Zeneca in Stockholm, comments “What we are doing now is forming a research group to explore the pros and cons of a foundation. Considerations include the value and interest for the group as a whole and whether this would improve cash flow and key ratios for the company. There would be a one- off advantage in taxation and in the long run there may be tax advantages – especially if you have a surplus in the foundation, so that is a reason for doing this.”
Such a foundation, he points out, would be governed through a collective agreement on an ITP plan basis.