Swedish roundup: AP inquiry, SPP on occupational pensions
SWEDEN - Mats Langensjö, chair of the AP funds inquiry, believes current investment guidelines for the country's national buffer funds are not working.
Speaking at an Almedalen Week seminar, Langensjö said politicising investment guidelines was a "sure way of legislating for something to become obsolete".
He said the current guidelines were ineffective and had prevented the AP funds from being able to maximise their assets' worth.
Langensjö was unable to provide details on the findings of his inquiry, which he is to present officially on 21 August. But he did say during the seminar - entitled 'Can the AP fund mandate be change to create better returns?' - that he would submit a number of "clear" proposals.
The Almedalen event first started in 1968, when Olof Palme, then prime minister, was taking the ferry home from a summer holiday on Gotland, an island in the Baltic.
Locals asked for an impromptu speech, which he agreed to, thereby starting what has become an annual tradition in the Swedish political calendar.
In other news, a report commissioned by SPP argues that a lack of competitiveness and transfer rights in Sweden is one of the key problems facing the occupational pensions market.
The report - 'A better pensions market', written by political economist Andreas Bergh - calls for the abolishment of the current system.
Bergh argues that, in an effective system, the public pension should function as the basis for the majority of the population.
To achieve this, the cap on accrued pensions should be raised, and, for occupational pensions, he proposes a state-run administrative centre for fund selection, where the standard choice is conservative investments and lifetime payouts.
To increase competition, full transfer rights should be introduced, giving customers not only the right to swap providers but also the ability to shift between areas of labour-market agreements, Bergh said.
He said the current occupational pension system - which had "worked well in 1900 but was now increasingly obsolete" - should be abolished, and that some of the future premium pension assets should be used to strengthen the public pension system.
He also argued that all current administrative centres should be merged into a state-run entity that would also look after the default option.
Another issue often mentioned in Sweden is the lack of knowledge within the pension system; Bergh argues that this is due to a lack of competition, as providers have nothing to gain from providing more information.