Sweden has made the final decision to reform its system of national pensions buffer funds, with Parliament yesterday voting in favour of the plan to consolidate the five AP buffer funds into just three institutions.
The head of AP1 – one of the two AP funds to be axed in the reform – told IPE that staff at the 67-strong organisation had shown resilience and professionalism during the period of uncertainty.
Following yesterday’s vote in the Riksdag, Niklas Wykman, minister for finance markets, said: “With fewer AP funds, it will be easier to follow up and evaluate their operations,” adding that this was an important reason for the reform.
“In addition, management costs will be lower, which means that more will be left for future pensioners. In the long term, this will amount to billions,” he said.
Under the reform, taking effect on 1 January 2026, in Stockholm AP1’s operations and assets will be transferred to AP3 and AP4, while in Gothenburg, AP6 – the smaller private equity-only buffer fund — will be incorporated into AP2.
Kristin Magnusson Bernard, chief executive officer of AP1 since 2020, told IPE that ahead of being wound down, the organisation’s priority remained delivering on its current mandate, and safeguarding the long-term interests of Sweden’s pension system.
“We’re ensuring that our operations continue seamlessly throughout the year,” she said.
“I am very grateful for our strong governance from the board and all the way through the fund, as well our employees’ professionalism and team spirit.
“It’s impressive how they are all navigating this change process, especially given the market turbulence over the past months,” said Magnusson Bernard, a former economist and financial stability expert at the International Monetary Fund, European Commission and European Central Bank.
Managing a transition of this scale, on this time frame, in the public eye was challenging for all parties involved, she added.
“It involves taking full responsibility for managing a large and complex portfolio until the last day of operations, while preparing and executing on the transfer of assets and wind-down of operations,” she said.
It was new and uncertain territory, but the fund had experienced leadership and robust internal processes in place, she noted, which allowed it to handle large-scale projects with care and efficiency.
The five buffer funds manage some SEK2.1trn (€193bn) of capital in the income pension system.
The AP1 CEO said the funds would continue working closely together as they move into the execution phase of the consolidation process over the next few months.
Asked whether she expected many of AP1’s team to be hired by AP3 and AP4, Magnussen Bernard said AP1’s employees were among its greatest strengths.
“As such, I am not surprised that they are now being courted by other employers and evaluating different options,” she said.
“Some recruitment processes are also underway at AP3 and AP4, and those roles are open both to AP1 staff and to external applicants,” she concluded.
Read the digital edition of IPE’s latest magazine
Rachel is IPE's Nordic correspondent.
She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere.
In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile
No comments yet