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OP Financial seeks to transfer pension insurance to Finland-based mutual insurer


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OP Financial seeks to transfer pension insurance to Finland-based mutual insurer

OP Financial Group has begun negotiations to transfer the management of its pension liability to Finland-based Ilmarinen Mutual Pension Insurance Co.

The board of trustees of OP Bank Group Pension Fund, which manages statutory earnings-related pension for OP Financial, has launched the negotiations for the nearly €1.1 billion worth of pension liability.

The pension insurance portfolio accounts for about 90% of OP Bank Group Pension Fund's total pension liability. OP Bank Group Pension Fund manages the pension insurance of about 260 employers, 12,000 employees and almost 9,000 pensioners. At the end of 2017, the Fund's pension liabilities totaled roughly 1.30 billion.

Based on the initial plan, the remaining pension liability would be transferred to Ilmarinen at or after the end of 2020. The transfer will not affect the retirement plan or pension coverage of OP Financial Group's staff or pensioners, the company wrote in a statement.

The deal is expected to close in July, and the transfer will take place by the end of the year, subject to regulatory and company approvals.

The deal is expected to improve OP Financial Group's common equity Tier 1 ratio by an estimated 0.5 percentage points.