The Swedish government has presented a bill to parliament to implement the EU directive on occupational pensions to come into force on January 1 2006. The Ministry of Finance says the underlying principle of the directive - and the bill - is the prudent person rule.
“In the bill to the Riksdag, the government proposes that the institutions should invest their assets in a prudent manner,” it says. “Technical provisions corresponding to pension commitments should be based on a market valuation of these commitments.”
It adds the new regulations would cover friendly societies that provide occupational pensions, pension foundations and the occupational pension business of life assurance companies.
It says: “The new regulations, which implement the European Directive on the activities and supervision of institutions for occupational retirement provision, represent the first step towards more modern and risk-based insurance regulation.”
“We are laying a firm foundation for stronger occupational pensions, while ensuring consumer protection for pensioners,” says Sven-Erik Österberg, minister for local government and financial markets.
Finansinspektionen, or Financial Supervisory Authority, will be responsible for supervising the financial operations of pension foundations.
The ministry is also preparing an updated solvency system for insurance companies, in line with the EU's work on Solvency II.