Swedish MPs discuss pension overhaul after Malta imbroglio

The suspension of a Maltese asset manager’s pension fund offered to Swedish savers has prompted a report by the country’s national pension agency, calling for an overhaul of the system.

The investigation into Sweden’s premium pension system, which supplements national pensions, was prompted by the criminal investigation launched into Falcon Funds, which was managed from Malta.

One of its directors was the former Nationalist MP, Tonio Fenech.

Malta’s financial regulator appointed auditors KPMG to take control of the pension fund, after it was investigated by the Swedish Economic Crime Authority over allegations that the fund was unable to pay back a total of €247 million (2.4 billion Swedish kroner) in savings to 22,000 investors.

The Swedish pensions authority recently announced that Falcon Funds would pay back 315 million Swedish kroner (€33 million), far less than what was expected to be recouped. The money will be deposited back into savers’ pension accounts. 

“It is of course positive that pensioners who have had Falcon’s funds now will get back some of the missing money. However, there are very large amounts that are still missing and that is very serious,” the Swedish pensions authority legal counsel Mikael Westberg said.

Prosecutor Arne Fors, who is conducting the criminal investigation, also said that the money has been traced to 10 different countries. 

Now a new inquiry into Swedish pensions has prompted economist Stefan Lundbergh to call for more state control on the private funds that offer the premium pensions.

Lundbergh was appointed to report on the pensions’ system overhaul following the Falcon Funds suspension.

“The system is not suited to the way people behave… we know that people are not as interested in the management of their pensions. Efforts for more education and transparency have not significantly made people any more interested. We have to adapt the system to make it safer anyway,” Lundbergh said.

Swedish minister Annika Strandhall

The pension group that undertook the study includes representatives of Sweden’s political parties. “There is broad consensus that we must jointly take responsibility for the development of the pension system,” group chairman Annika Strandhall, Sweden’s social policy minister, said.

Falcon suspension

Falcon Funds offered three sub-funds on the Swedish pension system, before it was accused of defrauding 22,000 pension investors by the Swedish pensions authority and delisted from the PPM system.

Falcon Funds’ directors have now sued their investment managers Temple Asset Management for damages, claiming they invested over €10 million of savers’ cash in what turned out to be an ‘advance’ to the mysterious Swedish trader Emil Ingmanson.

The reason Falcon Funds turned into a national scandal in Sweden is because the Swedish pensions agency believes the pension fund benefited from an irregular transfer of savers’ cash during a merger of clients of two private funds.

The trail of breadcrumbs led to Emil Ingmanson, who in November 2013 actually represented Falcon Funds in talks with the SPA to market its pension funds.

Ingmanson, who owns a Sliema property, wanted to open his own investment company Falcon Asset Management, which had its address at Temple Asset Management’s offices in Floriana, so that it could take over Falcon Funds’ investment control.

The upshot was a grave conflict of interest at play: money deposited by Swedish pensioners with Falcon Funds was being invested by its investment manager, Temple, into financial instruments owned by Ingmanson, while knowing he planned to replace it as investment manager with his Maltese company Falcon Asset Management.

Temple was fined a total of €612,000 by the Malta Financial Services Authority over breaches of 23 different standard licence conditions and had its licence suspended.

Now Ingmanson lives in London, where he is reported to have changed his identity, according to Swedish newspaper Expressen. In Malta, Falcon Funds has filed a court injunction against any attempt by Ingmanson to sell his apartment.