Credit insurance and pension foundations

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Many employers secure their employees' pensions through both credit insurance and pension foundations.

A pension foundation is established by the employer for the sole purpose of securing the employer's pension commitments to employees. The employer is responsible for fulfilling the commitments. The assets of the foundation serve as collateral if the employer is unable to meet its commitments.

If the value of the pension foundation's assets exceeds the employer's liability for the pension commitments, there is a surplus in the foundation from which the employer can take payment (indemnification) for its pension costs. Even if the foundation were to run a deficit, in some cases the employer may receive indemnification, but only from the foundation's returns.

Group-wide pension foundation

A pension foundation may be common to several different employers, for example within a group. Each individual employer has its exclusive share of the assets of the foundation. The value of the share is determined by the employer's contributions to the foundation, the return on the assets, and the indemnification received by the employer from the foundation.

The assets of the foundation are managed jointly for the employers who are members of the foundation and the assets are distributed according to the share of each employer.

Credit insurance with PRI Pensionsgaranti

An employer who takes out credit insurance with PRI Pensionsgaranti and, at the same time, has its commitments secured in a pension foundation, pays a reduced credit insurance premium on the amount covered by the assets of the pension foundation.

Reborrowing

The company can reborrow funds from the pension foundation. In the case of reborrowing from the foundation, the company is required to take out credit insurance.