Swedish buffer fund AP4 saw investments return of 14.1% in 2013, with equities the largest single contributor, producing a 25.5% return.
The fund said it made a net profit of SEK32.4m (€3.6m), or 15%, up from SEK22.7m the year before.
Reporting annual results, AP3 said 2013 was characterised by improving economic conditions, especially in the US.
The fund’s capital totalled SEK258.5bn at the end of 2013, up SEK25.8m from 2012, after payments of SEK6.9m to the pension system.
Fixed income investments ended 2013 with a 0.1% loss, while credit made a return of just 0.13%
The inflation risk category returned 1.6%, and currencies ended with a loss of 0.9%.
Absolute-return strategies generated just 0.3% last year.
AP3 said it had now achieved its target of 4% real annual return measured over the last three, five and 10-year periods.
Kerstin Hessius, chief executive at AP3, said the Swedish pension system had come under financial pressure again, which would result in a 2.7% cut in pensions this year.
“This unfortunate situation is due primarily to labour market conditions,” she said.
The positive performance of the AP funds will have a positive effect on pensions, she said, but she added that this would not be seen by Swedes until 2015.
The latest forecast from the Swedish Pensions Agency suggested pensions would increase by more than 5% next year, she said.