A word for the CEO
Good results in challenging times
2021 was another year marked by coronavirus. However, KLP continues to deliver strong results on the back of good returns in the equity and property estate markets, and from its subsidiaries. These good results allow us to pass on an ample surplus to our customers and so help to keep their pension costs down. We see this as one of our main tasks.
The dramatic events that have marked the start of 2022 are rapidly putting last year in the shade. The war in Ukraine affects us all. People are being driven out of their homes. It is heartbreaking to see the images pouring in with all the brutality of war and the human suffering it causes. As an investor, KLP is doing all it can to show that we strongly oppose Russia’s violation of fundamental principles laid down in the UN Charter.
In an annual report, we have to look at the results from the previous year. In 2021, KLP delivered a value-adjusted return on customers’ pension funds of 8.4 per cent.
In the public-sector occupational pensions market, several customers reviewed their pension provision, but only two municipalities and a few companies chose to move their schemes to another provider. In December, the Storting adopted new rules on public-sector occupational pensions. Among other things, the changes mean that a customer’s solvency capital is now collected in a buffer fund where they have a say in how much to set aside. This could allow for greater freedom of choice in their investment management.
Both public-sector occupational pensions and the general pension system are changing. The regulations are wide-ranging and complicated. That is why we put a lot of work and resources into good guidance. To make it easier to obtain information, we have “My page” on our website, where an employee can find useful information about their rights and how their pension will be affected by their own choices, such as early retirement, voluntary part-time working or drawing a pension while still working, and much more. Many also want to discuss things with someone who can give personal advice, and we conduct around 10,000 such personal consultations in a year. We know this is highly appreciated.
We are continuing our efforts to improve and renew our pension systems. This is a multi-year programme aimed at automating many of our internal processes so our customers can get answers immediately wherever possible. It will provide a better customer experience and more efficient operation. It will also help to lower costs for our customers.
It is a great responsibility for us to manage over NOK 900 billion on behalf of our owners in the Norwegian local government and healthcare sector. KLP aims to be a driver for sustainable development and play its part in achieving the global objectives set out in the UN Sustainable Development Goals and the Paris Agreement. We have been part of the UN Global Compact since 2003. We take active steps as an owner and through our investments to limit global warming. This produces results.
Today, however, the war in Europe overshadows everything else, and we sincerely hope that the conflict can be resolved in a way that limits human suffering and destruction. Our thoughts go out to those affected.