By choosing an ITP 2 book reserve method pension as a form of financing the retirement pension, it becomes possible to control the pension capital until it is time to distribute the pensions.
What is an ITP 2 book reserve method pension?
The retirement pension in ITP may be financed and secured in two ways. Either the company is itself liable for the retirement pension through booking the pension commitments as a liability on the balance sheet, or the company purchases pension insurance from Alecta. Booking the pension commitments as a liability is a very good and long-term financing method. Either the company enters it as a liability on the balance sheet, or a corresponding amount is placed in a pension foundation. Under the ITP agreement, an ITP 2 book reserve method pension is credit insured and administered by PRI Pensionsgaranti.
A long-term source of financing
The pension capital works as a long-term source of financing on advantageous terms at the same time as the employees’ pensions are secured. In the event the company achieves good return on the pension capital over the long-term, the company also directly benefits.
Most major companies in Sweden have used the method since the ITP plan came on the scene in 1960.