The committee for the Swedish insurance employees’ occupational pension agreement (FTP) has selected Alecta as its defined contribution (DC) default provider, following a procurement process.

The pension company’s Alecta Optimal Pension will be the DC default option for the FTP 1 and FTPK within FTP2 pension plans. The agreement takes effect from January 2025 for five years.

It means that members of the scheme who do not choose their investments will be placed in the traditional pension insurance product, without repayment protection, offered by Alecta.

Alecta, which is still under supervision from the Swedish Financial Supervisory Authority (FSA) in relation to its previous investments, said winning the contract showed “renewed confidence” in it as a provider.

The pension provider plans to reduce the fee for its product from 0.1 per cent to 0.09 per cent when the new contract begins. Its contribution ceiling will remain at SEK 480 per year.

Commenting, Alecta head of product and analysis, Fredrik Palm said; “The fact that we have been given renewed confidence as a default in the FTP plan is proof that we have a very good product, which in addition to low fees can create competitive returns and has a well-balanced guarantee level. The product is also equipped with unique features that reduce the volatility of the pension amounts before and during payment.”

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