PPM sets a model
Both the Nordic region and the rest of Europe are looking at Sweden. The new Swedish Premium Pension System (PPM) is attracting the interest of fund managers and pension professionals across the continent. It’s still early days, but some believe, that this system will be the model to follow by defined contribution (DC) pension schemes in the years to come.
“Sweden has been a pioneer in this field and the Swedish market is the laboratory for the future new pension schemes,” said Jean-François Pinçon, head of business development at Credit Agricole Asset Management , during the conference on Nordic fund management in Stockholm last month. “PPM is the model for DC state pension in Europe and gives very easy access to foreign fund providers,” he said.
The PPM now has 4.4m investors and the total amount invested so far represents €6.6bn. The new system has already made important changes in the distribution networks. “The market share of retail banks before PPM was introduced was 83% and now it’s only 35.2%,” said Kajsa Lindstahl, president and CEO of Swedish group Banco AB. “Insurance companies, who before PPM had a 9% market share, have now more than 43%.”
Open to all UCITS providers registered in Sweden and had signed a co-operation agreement , the PPM offers now around 500 different funds from 50 different fund managers. “PPM is affecting the asset management industry in Sweden,” said Bengt Bergholz , head of external funds and senior vice president at SEB. “More and more people are realising that there is something more apart from the banks and big players are losing market share. Selling external funds, as we do, can be one of the answers to this situation, where the traditional distribution networks and providers are changing.”