Sweden considers closing two AP funds in major review

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  • Sweden considers closing two AP funds in major review

SWEDEN - The Swedish government has launched a review of the AP funds that could result in the closure of two.

As part of the review, the performance of national buffer funds AP1 through AP4, as well as AP6, is to be assessed.

The ministry of finance said changes in the financial market and lessons learned over the last decade justified a revision of the framework, introduced in 2001.

It also said the review would consider the investment guidelines currently applied to the funds that limit the extent of their exposure to private equity and infrastructure.

The ministry noted that, in the interests of cost-effective management, it would look into the closure of several buffer funds, although it stipulated the number of funds should not fall below three in an effort to limit the concentration of power in a single entity.

It said a benchmark had been set that the number of buffer funds should not be reduced to fewer than three, allowing for the closure of two AP funds.

Marianne Dicander Alexandersson, who was named chief executive at AP6 at the end of last year, said she welcomed the review, indicating that the guidelines governing the fund were established in 1996.

In the past, the government has criticised AP6 for its long-term performance.

Last year, an annual evaluation of all AP funds said that while their performances had always been explicable, they were nonetheless unsatisfactory.

At the end of December, the five buffer funds managed assets totalling SEK895bn (€99.5bn), with AP7, which manages all premium pension assets, managing a further SEK107bn.

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