A book reserve method pension scheme combined with credit insurance means that employees' pensions are guaranteed. Credit insurance is often a prerequisite for deductibility.
Which pension commitments can be covered under credit insurance?
- ITP book reserve method pension schemes
- Commitments in other contractual areas
- Commitments in companies’ own plans
- Individual commitments
- Early retirement pensions
- Foreign pension commitments
What are PRI Pensionsgaranti's requirements?
- PRI Pensionsgaranti carries out customary credit assessments on an on-going basis, which include, among other things, the company's long-term performance ability of the company, financial position, and ownership structure.
- A guarantee by the group's parent company is always requested if the company is part of a group.
- In some cases, additional security is required.
Contract term and renewal
- Credit insurance contracts have a term of up to three years. Thereafter, the contracts are reviewed for renewal.
- If the credit insurance is cancelled by PRI Pensionsgaranti, the pension liability can be settled over a period of up to five years.
- In some cases, PRI Pensionsgaranti may decide that the pension liability must be settled over a shorter period of time.
See the insurance terms and conditions for more information.
What does credit insurance cost?
- The premium is based on the PRI's insurance liability, which is the same as the estimated cost of buy-out by Alecta.
- The premium is discounted if security has been lodged for the insurance.
- The premium is included in the calculation of any dividend.
- The premium can be adjusted according to assessed credit risk.
|Redemption cost||0.225 %|
|Redemption cost (eligible collateral)||0.135 %|
|Redemption cost (foundation or bank guarantee)||0.045 %|
Other credit insurance (not ITP 2)
- The premium for the credit insurance is currently 0.45% of the pension liability as at 31 December of the previous year.
- For pension liabilities covered by pension foundation assets or other adequate security, the premium is reduced to 0.15 per cent.
The following applies to both ITP 2 and other credit insurance
- Supplemental premium. In some cases, a special supplemental premium may be charged. The supplemental premium does not confer a right to any dividend and is 0.1 - 1.2 percent of the pension liability.
- Premium for early retirement pensions and limit, 0.2 per cent of the amount granted.
- Minimum premium, SEK 7,500 per policy.