SWEDEN - The Swedish Premium Pensions Authority has reacted vigorously to reports that its new online fund selection tool has been a flop.
The Dagens Industri paper had branded Lotsen (‘pilot'), a failure after just 4,056 out of a potential 100,000 users had used it since its launch last December.
"We are not surprised by this number and we are fully aware that it wouldn't attract that much attention because people are reluctant to take care of their Premium Pensions," said PPM spokesman Olle Sylven.
The system was designed to attract more people to the PPM funds and serve people who are confused by the multiplicity of funds and wanted a simpler choice.
According to PPM's website the tool asks consumers to answer questions about risk, age and income, before it allocated one of PPM's seven fund portfolios.
PPM announced last year that around two of the five million pension savers wanted to choose a fund for their pension but believe they lack sufficient knowledge to do so - Lotsen should have been the answer.
Swedish pension consultants Soderberg & Partners pointed out last year that there were "serious deficiencies" with the system, warning against over-optimistic target returns and a failure to include Swedish equities in the portfolio.
Erik Rosengren, analyst at Soderberg, says "PPM had some strange conception of how they defined risk in the different asset classes. My guess is that they said they would make it simple, but they didn't."
It comes amid an already troublesome start to the year for PPM. In June IPE already reported that PPM was facing an investigation by Sweden's Office of the Chancellor of Justice following some 70 complaints of delayed trading during May's market turbulence.