Sweden’s SPP group faces a challenge in the high court from white collar employees attempting to claw back a share of more than SEK66bn (e7.9bn) in pensions surplus.
SPP was to begin handing the surplus back to its employer/union controllers at the end of August. However, a writ has been handed to the courts by a Swedish pensioners association asking for a freeze on payments while the law on surpluses is clarified.
Kenneth Lewis, a member of the Swedish bar and lawyer at Stockholm- based Lewis Advokat Barå, representing the pensioners, explains: “This surplus, calculated from the liquidity base of SPP, was discovered at the end of 1998 and actually represented SEK78bn. We previously sued SPP and the group allocated SEK12bn to cover our claims, although there are different calculations as to how much they paid out to members. However, SPP never admitted that they had specifically done anything wrong before. They thought that they had been able to buy off the pensioners.”
He says that SPP then decided the remaining SEK66bn belonged to the sponsors.
Lewis says the pensioners are suing SPP on the basis that the statutes of the pension foundation note that the owners of the assets are both the sponsors and beneficiaries. “The beneficiaries obviously haven’t got their fair share here.”
He explains some anomalies of Swedish law complicating the case. “There is a law that governs insurance companies stating that when you have a surplus it should be shared equally. However, Sweden has a peculiar tradition, which says that when an insurance contract is created by collective agreement it may, so to speak, not follow all the rules, but no-one knows exactly what this means.
“The problem with the case is there is no jurisprudence to tell what a court might decide. There is so much money involved though that the pensioners felt that they had to see what they could do. We’re not even asking for a specific amount of money now, just a change of principal.”
The pensioners are proceeding with two pilot cases under Swedish law.
Lewis notes: “In one of them we can show without a doubt that an individual has paid in contributions himself. We can also show that when this man negotiated with his employer which then took over the payments, that these were deducted from his salary. Neither he nor the company were members of any union organisation in Sweden. His money has been with SPP all these years and the question is why they won’t consider his money as part of this surplus.”
Jan-Erik Junsgarden, legal adviser at SPP, commented that the group were preparing their response to the legal proceedings with a view to presenting them to the courts on August 25. He declined to comment further.