SWEDEN - Sweden's first pillar pension system reached a net inflow of SEK71bn (€7.7bn) in 2006, further increasing its surplus, according to a report by the Swedish social insurance agency, Försäkringskassan.

Following today's publication of the Orange Report 2006, the annual results of Sweden's income and Premium Pension system, Ole Settergren, head of pensions at Försäkringskassan, said: "The margin of the system increased from 0.44% to 1.49% in 2006."

Heralding last year's as a very positive result, Settergren told IPE that the increased inflow was mainly due to the increased employment rate in Sweden, but also to the good return of the buffer, as managed by the AP-funds.

The agency expects the employment rate to further go up, but is uncertain about the future buffer fund returns: "It is relatively volatile development regarding the assets as they are mainly invested in equities," said Settergren.

In spite of the appreciation of public pensions in recent years, Settergren thinks that over the longer term this trend will slow down.

The agency hopes that increased retirement ages will be put on the political agenda again, as these would contribute to positive future results and increase benefit levels. "Otherwise, we hope that legislation stays completely unchanged," Settergren added.