Norwegian pension company KLP has made several commitments to change its practices after an investigation by the Norwegian Competition Authority found it may have weakened competition in the public occupational pensions market.

The authority opened its investigation in 2022, seeking to understand whether KLP had abused its dominant position in the market for public occupational pensions.

“Our assessment is that KLP has harmed competition by actively and strategically influencing municipalities not to put public occupational pension services out to tender,” said Competition Authority director general, Mads Magnussen.

“This may have resulted in higher costs and lower-quality services for municipalities.”

In response to the conclusion, which KLP did not agree with, the pension company proposed several commitments to address the impact of its previous practices.

These included not actively influencing municipalities to refrain from assessing or launching tenders for public occupational pension services, and ensuring its communications are objective and balanced and do not create doubt over other providers’ ability to deliver these services.

KLP also committed to not engaging in one-sided or non-transparent influence through close relationships and to encourage municipalities to obtain information from multiple potential providers, and to send an information letter to correct misunderstandings arising from its previous communications.

Additionally, the pension company promised to implement internal measures to ensure compliance with the commitments, to not circumvent the commitments in any way, and for a monitoring trustee to be appointed to oversee its compliance with its obligations.

“We have had a good and constructive dialogue with KLP and are satisfied that the company has chosen to address the Norwegian Competition Authority’s concerns by offering to change its practices,” Magnussen said.

“This has enabled us to resolve the case through measures that can quickly improve competition in such an important market.”

Responding to the closed case, KLP CEO, Sverre Thornes, said: “We are pleased that after more than four years we can finally put the matter behind us and look forward.

“As a major player in the market, we understand that we have a special responsibility. Therefore, we have chosen to implement measures that respond to the authority's concerns, so that we can continue to develop good services for our customers.”

The pension company noted that the authority had closed the case without concluding that there was a violation of the Competition Act.

KLP executive vice president for life and pensions, Cathrine Hellandsvik, added: “The measures are something we ourselves have proposed and want to implement.

“We are adapting our guidelines for customer communication and strengthening the distinction between advice and sales. Overall, we believe that this will make us even better equipped to meet customer needs.”

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