Complicated financial instruments in occupational pension funds

On the whole, the occupational pension funds' management of this type of holding appears to be satisfactory. Some occupational pension funds report, however, that their risk control function is small and that the personnel have relatively little occupational experience. A majority of the occupational pension funds also have all or large portions of their capital outsourced to external asset managers. And some of these funds do not have their own asset management system.

The investigation has raised new issues regarding the occupational pension funds' order placement expertise as well as their ability to verify and evaluate external asset managers.

FI will take the following measures

Finansinspektionen is going to follow up on the few occupational pension funds in which their responses raised additional issues or may indicate deficiencies in their organisation. What is primarily followed up on is whether a small and perhaps inexperienced risk control function has sufficient control of the risks and the external administrators.

*An occupational pension fund is a special type of mutual benefits society which administers occupational pensions. They are not allowed to conduct active sales.

The operation mainly relates to traditional commission and defined benefit pension insurance. The occupational pension funds cover approximately 5 per cent of the life insurance market.