The Skr77bn ($9.5bn) pensions surplus saga surrounding Sweden's ITP white collar workers' insurance provider SPP, looks finally set to be resolved this month.

A meeting of the SPP board on December 15 will consider proposals from the SAF Swedish employers federation and the PTK federation of salaried employees, before reaching agreement on the redistribution of the excess pension assets.

However, the final outcome of the crux meeting is still clouded in controversy, with the SAF demanding a return of the cash to employers, and the SPP and PTK seeking to disperse the money to pensioners and employees and keep it within the pension domain.

Klas Råstäter at SPP explains: The SKr77bn surplus arose from seven years of extremely bullish stock market performance, which we are now holding as a collective reserve for our members. In March this year the SPP board decided that cover for present pension liabilities would be set at 115% taking Skr26bn from the surplus. This leaves one block of Skr12bn and another of Skr39bn under distribution discussion."

He adds that a consensus has been reached to disperse the Skr39bn block to employers for the sole purpose of future retirement provision.

A clause also allows companies to withdraw a further cash element at the same time as making pensions ar-rangements. The issue of the remaining Skr12bn has yet to be decided though.

The SPP is seeking to allocate the money to current retirees and em-ployees as a pensions top-up. But Hans Gidhagen, pensions specialist at the SAF says the money should be given back to its rightful owners: "These assets belong to the employers and we don't see why pensioners and employees should receive any more than the allotted pension they are promised. There is also the issue that some of these companies are now setting up their own pension schemes and need this money to do so. Furthermore, if we increase the ITP insurance pensions then those companies with book reserve provisions will have to do likewise, which would cost a fortune."

Gidhagen says the SAF is currently formulating its proposals to present to SPP at the meeting. Contrarily, Gertove Andreasson, chief executive at the PTK, says: "The money should definitely stay with the employees, although we admit that some of it has come through employers overbudgeting for pensions. But, because the pension is an extension of employee salary, I think we have a concrete argument for keeping it. We have already negotiated in principle with the SAF that some of the outstanding Skr12bn will be paid to retirees and current employee funds. A portion is also likely to return to the companies, although we are not sure how much." Hugh Wheelan"

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