SWEDEN - The SEK220bn (€24.08bn) pension provider AMF Pension says it is to increase its bonus rate on traditional pension policies from five to six percent from next month.

The move will effect over two million policyholders.

“AMF Pension increases the bonus rate for the third time within just over a year,” the fund, owned jointly by the Confederation of Swedish Enterprise and the Swedish Trade Union Confederation, said in a statement.

In February 2004 AMF put the bonus rate up from 0.5% to three percent, increasing it to five percent in January this year, AMF’s chief executive Christer Elmehagen told IPE.

The next increase, which includes defined contribution policies, will be effective from April 1.

The fund said the bonus increase has been prompted by “strong returns on assets and our solid balance sheet”.

Elmehagen said AMF posted a 9.8% return in 2004, taking the solvency ratio to 200%.

“A six percent bonus rate is particularly attractive when you take into account the low interest rate environment we are currently in,” he added.