Measures for improved consolidation Freeze on client-company funds lifted
10/28/2002 7:01 AM EST
Measures for improved consolidation
Freeze on client-company funds lifted
The Board of the occupational pension insurance company Alecta has
decided on a number of strong measures to secure Alecta's capability to
fulfill its insurance undertakings in the short and long term.
As a result of these measures, the temporary freeze on the client-
company funds ceases as of November 1, 2002.
According to Alecta's consolidation policy, Alecta present takes
measures when the solvency margin is below 110 percent of insurance
undertakings. The present solvency margin is 105 percent. The measures
now decided are expected to provide an effect during 2002 of SEK 15
billion. As a result, the solvency margin is expected to rise to 110
percent. During 2003, ongoing effects are estimated to provide an
additional SEK 4 - 5 billion.
Action package includes
1. Freeze on client-company funds lifted
· As of November 1, 2002, the terms for use of client-company
funds are the same as applied prior to the decision on the temporary
freeze. This means that funds again may be used for payment of regular
premiums for ITP and ITPK invoices. In contrast, it is no longer
possible to receive any cash payment of the funds that is not related to
pension purposes.
2. Premium discount ceases
· At year-end 2001, the premiums for retirement and family
pensions were discounted by 15 percent as a result of the favorable
solvency margin. The premiums are being returned to the prior level as
of January 1, 2003.
· No premium discounts will be granted in 2003 for risk
insurance, mainly disability pension
3. Other measures
· The alignment period in the consolidation policy is extended to
three years.
· Surplus funds of SEK 4.9 billion held by Confederation of
Swedish Enterprise and the Federation of Salaried Employees in Industry
and Services (PTK) are being drawn back to Alecta.
· Existing funds for financing of any future increase in
lifetimes are being returned to Alecta's collective reserve. Alecta's
assumption regarding the mortality (lifetime) of the insured is more
than sufficient.
· During the period November - December 2002, companies with own
account provisions for their pension liabilities (PRI companies) may not
settle their liability through insurance in Alecta.
For further information, contact:
Lars Otterbeck, President, Alecta
+46 8 441 66 60
Cecilia Schön Jansson, Senior Vice President, Corporate Communications,
Alecta
+46 8 441 93 50, +46 70 526 93 50