- Nordic investors reveal a taste for the...
- Nordic funds take flight to infrastructu...
- Norwegian investors have high hopes for...
- What is liability driven investment?
- Illmarinen CIO takes ‘rare’ opportunity...
- Russia’s consumer explosion
- The Latin America hedge fund opportunity
- Commodities continue to attract business...
- Shedding bonds for an energetic future
- Norway’s global fund spreads its wings
The outcome of the manager selection process for the new Swedish ITP scheme – the pension plan for Swedish white-collar employees – has been slammed by Söderberg and Partners, one of two consultants to advise on the tendering process, for offering too little investment choice and falsifying costs.
“Collectum, the body which runs the new ITP scheme, has decided to limit the number of fund choices – probably because they believe most members won’t want to make a choice,” Gustaf Rentzhog, president of the consultancy, told nrpn. “But this means that members won’t get access to most of the products offered in the market.”
Just 10 mandates were awarded to the asset management and insurance community and of the 18 companies that pitched for awards only Alecta, AMF Pension, Länsförsakringar Liv, Nordea Liv & Pension, Skandia Liv, Länsförsäkringar Fondliv, Moderna Försäkringar, SEB Trygg Liv and Swedbank Försäkring were handed briefs. Alecta, which manages the old ITP system, was also chosen to run the default fund.
“The tendering process of the new ITP scheme paints a false picture of promised cost reductions and plays Russian roulette with pension savers’ money,” added Mr Rentzhog. “The key driver behind the selection process was price but Collectum’s depiction of cost-saving is misleading. For starters it does not include its own costs in the whole process and makes no allowances for the cost of advice.”
One of the biggest surprises was that the Handelsbanken-owned SPP, which pitched for mandates, failed to pick up any awards. “We are very surprised,” said Göran Holgerson, chief executive of SPP. “The ITP board only seems to have taken pricing into account, with little concern for other criteria, such as the quality of the product.”
As with the PPM, the Swedish Premium Pension System with more than 700 fund choices, the new ITP scheme has a default option – which is to be managed by Alecta. Experience from the PPM system suggests that the default option is likely to attract the largest amount of capital.
CL
