Technical problems delay Finnair pension shift
FINLAND – The Finnair Pension Fund has delayed the transfer of its 460 million-euro mandatory pension fund to Ilmarinen Mutual Pension Insurance Co. by six months due to “technical problems”.
Airline operator Finnair announced in late April that one of its two sub-pension funds, managed by three large asset managers and some smaller firms, would be transferred to Ilmarinen at the beginning of January 2005.
The assets of the sub-pension fund, known as TEL, will be now be transferred to the mutual pension insurance company on June 30 2005.
The contracts with asset managers will also be transferred to Ilmarinen, which was chosen after a selection exercise involving the biggest players in the Finnish market, group treasurer Mika Stirkkinen said.
Stirkkinen told IPE the delay was due to “technical problems” - which include the transfer of the extra resources a pension fund is required by the law to put aside as a solvency-guarantee.
Finnair is due to add a sum between ten and 15% to the TEL pension fund, Stirkkinen explained.
The treasurer said audits were conducted yearly to make sure the fund had enough back-up and stressed the delay was not due to the pension fund finding resources for the solvency guarantee.
The decision to transfer the management of the pension fund came as Finnair decided it took up too much management resources and volatility to the bottom line.
The TEL fund consists of “a diversified portfolio of investment assets” Finnair said in its April statement, but Stirkkinen declined to elaborate.
No alteration to the current arrangements for the second sub-pension fund is expected.