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PPM sees inflows of SEK26bn

SWEDEN - Net lending in the Swedish pension system  the Premium Pension Authority (PPM) and the national buffer funds - has been put at SEK26bn (€2.8bn) in 2007, almost 50% less than last year.

Around 28% of this amount will go into the national buffer funds, Mats Öberg, chief economist of the fund, told IPE.

Approximately SEK50bn was placed in the fund last year, amounting to around 1.9% of the nation's gross domestic product.

This reported decrease for 2007 is because of a change in the time frame of allocation, explained Öberg.

He explained the PPM last year invested twice, once in the beginning of the year for 2005, and a second time at the end of the year for 2006.

Announcing the figure in a statement today, PPM said the average sum per pension saver is SEK4,500.

Today's release also said there are now nearly six million people in the PPM system, and assets across all the funds totalled SEK296bn to the end of October.

New savers into the system are mostly people starting out work, after leaving school, college, university or military service.

They are also likely to choose providers performing at the top of the market, such as Alecta or AMF, or the best performing sectors, such as emerging markets, or shift into the AP7 default fund.

Under the complementary first-pillar defined contribution plan managed by the PPM, Swedes are required to choose a portfolio from a range of over 700 funds, though a commission has recommended reducing this number of funds.

Moreover, IPE wrote in August an increasing use of financial advisers for fund selection in the premium pension plan could pose problems for the system as it generates potential bulk trading volumes, the number of people using professional advisers in fund selection and manage their PPM portfolio for them has recently increased.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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