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UNION

Union leader in hot seat over AMF Pension row

The head of Sweden’s main trade union group is facing a storm of media criticism following revelations that she approved a lavish pension package for former AMF Pension CEO Christer Elmehagen.

Published: 24 March 2009 09:03 CET
Union leader in hot seat over AMF Pension row

AMF Pension has come under fire recently when it was revealed that the company awarded generous pension and bonuses to the company’s highest ranking executives at the same time as it announced cuts to pension payment to the millions of Swedes whose retirement savings are managed by the company.

Elmehagen alone earned around 100 million kronor ($12.6 million) during his ten-year career at the helm of AMF Pension, including a pension payment worth more than 30 million kronor.

The decision to give Elmehagen such a generous pension was approved by Wanja Lundby Wedin, head of Sweden’s Trade Union Confederation (LO), who also sits on the AMF board.

Wanja Lundby Wedin, however, contends that she was in the dark about the payments.

“I feel cheated,” said Lundby Wedin.

“I have not been party to any decision with consequences such that he would receive 30 million kronor for three years. I get angry when I see how much he has received.”

But the chair of the AMF Pension board, Göran Tunhammar, disputes Lundby Wedin’s defence with regard to Elmehagen’s pension payments.

He said on Tuesday that all members of the board received information about the former CEO’s pension at a board meeting in March 2004.

“We went through how we had discussed this and informed about it, but not in any particular detail as it was a complicated agreement with two agreements on top of each other,” Tunhammar told Sveriges Radio (SR).

Tunhammar also added that the board knew that it was a preferential agreement and that it would be very expensive.

No one on the board registered any objections, according to Tunhammar.

Elmehagen’s pension agreement was framed by AMF Pension’s remuneration committee, which was made up of chairperson Göran Tunhammar, Lennart Nilsson from the Confederation of Swedish Enterprise (Svenskt Näringsliv) and LO’s Erland Olausson.

Christer Elmehagen’s pension agreement is detailed in AMF Pension’s accounts which describe “supplementary premiums” for Elmehagen of 700,000 kronor per month according to the contract signed in 2004.

The information is also included in the firm’s annual reports for 2006 and 2007. During the whole of this period Lundby Wedin sat on the board.

Sven-Erik Österberg, a leading Social Democrat politician expressed regret over the revelations on Tuesday recognizing that the scandal has “damaged confidence in the movement and the party.”

AMF Pension’s board has decided to commission the firm’s external accountants to review both the large pensions pay outs to Elmehagen and also the timely decision by the former CEO to move his pension savings prior to an announcement to cut dividend rate payments to pensioners following stock market falls.

Elmehagen moved his 33 million kronor pensions saving to protect the capital and avoid the eight percent cut imposed on all of the firm’s existing pensioners.

ECONOMY

Pension reform, investment, new jobs – Macron unveils France’s post-Covid recovery plan

French President Emmanuel Macron has announced a series of economic measures, looking beyond the pandemic, although the much-anticipated pensions reform will be delayed until Covid is "under control".

Published: 13 July 2021 11:00 CEST
Pension reform, investment, new jobs - Macron unveils France's post-Covid recovery plan
A nurse watches Macron's TV address on Monday. Photo: JEAN-FRANCOIS MONIER / AFP.

Obligatory vaccines and the extension of the health pass made the headlines following Macron’s live TV address on Monday evening, but the President also sketched out his vision for France’s post-Covid economy.

Some of the measures he announced represent a return to the priorities he set at the beginning of his tenure, while others have been shaped by the pandemic.

Pension reform

There had been much speculation about a return of controversial plans to reform France’s retirement system, which were shelved at the start of the pandemic.

Macron confirmed that he planned to raise the retirement age – most people can currently retire at 62, but a number of ministers have been pushing to raise the legal minimum to 64.

READ ALSO France to tackle fourth Covid wave with stricter border controls, health passports and compulsory vaccines

“Because we are living longer, we will have to work longer, and retire later,” Macron said. “Not tomorrow, not brutally, and not in a uniform way because we will take the difficulty of a job into consideration.”

The government will begin consultations with workers and employers in September, but “will not undertake the reform so long as the epidemic is not under control and the recovery guaranteed,” Macron said.

This could mean his plans are not implemented before the presidential election in April 2022.

Macron also returned to a controversial point from the 2019 reform plan which lead to widespread protests: the abolition of the country’s 42 different pension regimes, which currently mean many public-sector workers can retire early. Under the new plans, these special regimes will be abolished for new employees, but people currently employed can keep the generous exceptions.

EXPLAINED: What are France’s special pension regimes?

The plan also includes a minimum pension of €1,000 per month after a full career. “A life of work must offer a dignified pension,” Macron said.

Unemployment reform

Changes to unemployment benefits will be “fully implemented” on October 1st. The reform was supposed to come into effect on July 1st, but in June, France’s Council of State decided to suspend certain elements regarding the way benefits are calculated.

“Uncertainties around the economic situation do not allow for implementing, at this moment, these new rules which are meant to support job stability by making benefits less attractive for workers alternating between short contracts and inactivity,” that decision stated.

“In France, you must earn a better living by working than by staying at home, which is currently not always the case,” Macron said on Tuesday.

From September, the government will also launch “a massive plan for the training and retraining of the long-term unemployed”.

“We have seen during this crisis the strength of our social model,” Macron said. “It’s a jewel we need to preserve. This social model rests on one foundation: work.”

Investment plan

During his address, Macron also emphasised the importance of economic sovereignty, and said an investment plan would be unveiled in the autumn following consultations this summer. The objective is “to build the France of 2030”, and to “reindustrialise, reconcile growth with ecological production”.

“We saw during this crisis the consequences of dependence,” Macron said, calling for French and European independence with regards to technology and primary resources.

Last month, the President announced a series of measures designed to stimulate French innovation in healthcare technology.

Support for young and old

Finally, Macron announced additional support for those who have been hardest hit by the pandemic – young people “who sacrificed so much even though there was little risk for themselves”, and elderly people “who more than others feared for their lives”.

In September, the government will unveil a new revenu d’engagement (commitment-based income) for young people not in education, employment or training. This “will be founded on rights and responsibilities”. This could resemble the garantie jeunes, a monthly benefit for 16 to 25-year-olds not in employment or training, created under François Hollande’s government.

For the older generation, Macron avoided specifics. “We owe them a great humanist ambition for independence, strengthened home care, modernised retirement homes,” he said.

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