Swedish roundup: AP1, Willhem AB, KPA Pension, AMF
SWEDEN - AP1 is boosting its property portfolio by establishing its own real estate company, Willhem AB, and investing SEK7bn (€770m) in the asset class.
The new company is buying some 11,100 rental properties across Sweden, of some 860,000 square meters, out of which 87% are flats.
The deal will be completed by the end of the year, while AP1 will take over operational management by spring.
The real estate is currently owned by Finanshuset Acta. The deal is subject to approval by the boards and the competition authority.
In other news, eight out of 10 KPA Pension customers believe weapons are the most or second most important investment exclusion.
Because of this, KPA is joining forces with UNA-Sweden against personnel mines.
From the beginning of next year, KPA will focus on supporting the rehabilitation of people injured by mines by continuing its work in Cambodia through Operations Enfants du Cambodge, which, together with the UN and Cambodian Mine Action Centre, helps victims of mines lead a "functioning and dignified life".
Other areas customers are keen to exclude include gambling, alcohol and tobacco.
Meanwhile, AMF's report on pensions 2010 shows Swedish pensioners are some of the most satisfied in Europe.
However, AMF said Sweden was facing future challenges, with a widening wealth gap among pensioners.
Its report identified three clear trends: a wider wealth gap among pensioners, increased longevity and later career starts, and fewer working people having to support an increasing number of elderly people.
The report also shows that pensioners keep their buying power for a fairly long time and that most are satisfied with their lives.
Those aged 70 have kept 96% of the disposable income they had when they were just under 60 years of age.
Since 1991, income for 80 and 85 year olds has increased by 40%, taking inflation into account.
Changes in the pension system will create greater gaps in wealth in the future, according to the report.
Some will be better off than earlier generations, but some will not see their expectations fulfilled.
Because of the move toward defined contribution (DC) pensions, such as the premium pension system, individual investment choices will have a greater influence on the final pensions received.
People who make successful choices may get as much as five times better premium pensions payments that those who did not make such good choices, AMF said.
The move toward DC and choice-based pensions within the occupational pensions system will lead to similar results, according to the survey.
As life expectancy increases and as many people start their careers later, pensions will have to be paid out over a longer period of time.
The report also shows that most people choose to have their pensions paid out during a specific period of time, rather than over the length of their lives.
This means more money at the start of retirement, but less toward the end, when the occupational pensions have been paid out fully.
The report predicts this will lead to older pensioners with relatively small pensions.