AMF, Sweden’s second biggest occupational pension fund, has issued a stark warning about the negative effects of the rise of huge passive investment funds on corporate governance in the Nordic country, and said legislators must take this into account when shaping pension reforms.
Anders Oscarsson, head of equity and stewardship at the SEK850bn (€76.3bn) pensions institution, said large index funds were increasingly dominating as owners of Swedish companies — a development he said posed a threat to the Swedish ownership model.
In the pension fund’s 2024/2025 stewardship report, published this month, he said: “The large, primarily foreign, index giants are significant owners on the Stockholm Stock Exchange, and their share is growing.”
AMF increasingly saw those funds as the largest, second-largest or third-largest owners in large and important Swedish companies, Oscarsson said.
“Such ownership should come with obligations, but unfortunately these investors rarely live up to this. For example, they rarely take a seat on the companies’ nomination committees, and they often deviate from practice, for example regarding discharge from liability,” he added.
Oscarsson said that if today’s active pension management was to be replaced by passive index funds, then Swedish corporate governance, the Swedish capital market and Swedish industry would be affected.
“It is a perspective that needs to be taken into account in decisions that affect the conditions for both occupational pensions and the public pension, for example the reform of the AP funds, the management of traditional insurance in the public pension and the premium pension,” he noted.
Sweden’s system of national pensions buffer funds – the AP funds – is in the process of a radical reform, with the number of buffer funds being reduced to three from five.
Among other pension reform initiatives happening in Sweden, at the end of April, the Pensions Group of Swedish parliamentarians from all political parties agreed to look into improving how the payout phase of the first-pillar premium pension system is managed – and whether to remove the Swedish Pensions Agency’s (Pensionsmyndigheten) mandate to manage some SEK100bn (€9.1bn) of pensions money.
AMF said it was one of the largest active owners on the Stockholm Stock Exchange, and had worked on 39 nomination committees during the 2024/2025 general meeting season and participated in more than 80 general meetings.
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