Ericsson will capitalize the Swedish pension trust it has established for the management of pension funds related to the obligations under the Swedish ITP pension plan.
The Board of Directors of Telefonaktiebolaget LM Ericsson has resolved to establish and to capitalize a Swedish pension trust for the purpose of funding the pension liabilities under the Swedish ITP plan. The Board of Directors has resolved to transfer approx. SEK 8,5 billion of cash or cash equivalents into the trust. The objective of the trust will be to diligently manage entrusted funds for the purpose of covering the pension obligations under the particular pension plan.
"By creating a separated pension trust we will reduce costs, create financial flexibility and a more adequate balance sheet, easier to analyze in line with international practice," says Karl-Henrik Sundström, Chief Financial Officer at Ericsson.
The Ericsson pension trust was established during the fall of 2004 and will be capitalized during January 2005
Currently the pension liability is reported as provisions in the Group balance sheet. When the trust has been capitalized, these provisions will be off set by the trust's assets.
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