Swedish union giant in hot water over fat-cat pension

29th March 2009, Comments 0 comments

The 5.5 million euro bonus has raised eyebrows in the Scandinavian country of nine million, where remuneration tends to be lower than in the US and other parts of Europe.

Stockholm -- The head of Sweden's influential Confederation of Trade Unions (LO) was in hot water Wednesday amid a growing scandal over lucrative pension pay-outs, with several editorialists calling for her resignation.

LO's secretary general Wanja Lundby-Wedin is accused of approving a 60-million-kronor (5.5-million-euro, 7.4-million-dollar) pension agreement for the former head of the AMF Pension fund, Christer Elmehagen.

The sum has raised eyebrows in the Scandinavian country of nine million, where remuneration tends to be lower than in the US and other parts of Europe.

AMF is co-owned by LO and the Swedish Confederation of Enterprise, and Lundby-Wedin is LO's representative on the board of AMF.

She has in recent days denied knowledge of the lucrative deal, which has sparked anger notably among LO's 1.7 million mostly blue-collar workers.

Yet AMF Pension's chairman, Goeran Tunhammar, told Swedish Radio on Wednesday that Lundby-Wedin had been aware of Elmehagen's pension deal since 2004.

"We ... informed (the board) of it, but not in any great detail since it was a complicated agreement ... Our review was noted down (in the minutes) and there was no objection from the board," Tunhammar said.

Political observers and editorialists have said that whether Lundby-Wedin knew of the deal or did not, she had not done her job.

"A person who is paid to monitor a company should take responsibility for its business. Or resign," Sweden's paper of reference Dagens Nyheter wrote on Wednesday, a call echoed in several other dailies.

Dagens Nyheter noted that Lundby-Wedin sat on the board of 24 companies, while financial news daily Dagens Industri said AMF's 11 board members held a total of 119 board positions.

The scandal comes just weeks after media revealed that several AMF executives received lofty bonuses shortly after the company announced that it was reducing clients' pensions by eight percent due to the global economic crisis.

The executives decided to pay back their bonuses after the reports.

AFP/Expatica

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