KLP achieved a returns result (returns in excess of the average guaranteed rate of return) of NOK 6.1 billion in the year to date. Value-adjusted returns on customers’ assets were 1.6 per cent in the third quarter and 2.9 per cent for the year to date. Book returns were 3.1 per cent so far this year. Investments in property and shares contributed most to profits in the third quarter
“We are pleased to be able to present such strong results after the third quarter. The return on our customers’ pension fund is well above the return we have guaranteed, and our costs are low. This creates value for our customers and our owners,” says CEO Sverre Thornes of KLP.
“We are very well equipped to face weaker periods without affecting our customers,” says Thornes.
Well equipped for new pension regulations
KLP has seen stable underlying growth in the premium reserve. The ongoing municipal and regional reform does not so far seem to be producing big movements in these sectors’ customer relationship with KLP.
Just before the summer the employer and employee organisations agreed on the principles for changes to the public sector occupational pension. This scheme makes it easier to combine work and pension, and plan when oneself wants to retire. For several decades employees in the public sector will receive a pension with elements from both the old and new occupational pension schemes, with supplements for large groups with individual guarantees and transitional schemes. KLP is in the process of implementing IT systems to handle these challenges for both employers and their employees.
“KLP is well-equipped to meet increased complexity as a result of regulatory changes. New regulations provide greater choice for individuals and will create a greater need for information. Requirements toward expertise and systems at the suppliers will increase. We are on schedule with establishing a new pension guide, where our members can simulate how different pension and work choices will impact their pension,” Sverre Thornes says.
The changes in the pension scheme for public-sector employees will take effect from 1 January 2020.
Green investments
KLP has significant investments in renewable energy, both in Norway and abroad. The company is focusing especially on increasing renewable energy capacity. In the third quarter, three new renewable energy plants were completed: a wind farm in Kenya, a solar energy facility in Honduras and a biomass plant in the UK. In recent years, KLP and its partners have contributed to eight new renewable energy plants that will produce electricity for 6.3 million people.
In September, KLP Banken launched a green mortgage for members, which offers lower mortgage rates to members who choose to upgrade or purchase climate-friendly housing.
KLP also refers to the company’s interim report for the third quarter at klp.no
Key figures after the third quarter 2018
Value-adjusted return on capital: 2.9 per cent
Book return on capital: 3.1 per cent
Premium income (excl. added reserves): NOK 31.3 billion
Pensions and other benefits paid (excl. transferred reserves): NOK 13.6 billion
Total assets, KLP Group: NOK 692 billion
For more information, contact:
Chief Executive Sverre Thornes: tel. +47 977 44 007
Group Chief Financial Officer/Executive Vice President, Finance Aage Schaanning: tel. +47 905 24 312
Finance Director Oliver Siem: tel. +47 934 31 820
Information Director Sissel Bjaanæs: tel. +47 932 56 350