IPE Nordic Briefing: Sweden’s national pensions buffer funds to be trimmed down

It has finally been made clear to Sweden’s national pensions buffer funds that two of the five will disappear. The AP funds reform was given the green light by politicians, with the cross-party pensions group picking the options of liquidating AP1 in Stockholm, and in Gothenburg, of merging AP6 into AP2.

Kristin Magnusson Bernard, AP1’s chief executive officer, said the fund she has headed up since 2020 would begin implementing the change – which will see AP1’s SEK476bn (€41.4bn) divided equally between the remaining Stockholm-based AP funds, AP3 and AP4.

“We will contribute our expertise and experience for the good of the pension system and the organisations concerned,” she said.

Meanwhile, Katarina Staaf, AP6’s CEO, was pleased politicians had tried to make space for “our successful model of managing these assets” in an integrated unity with AP2 – even if the private-equity only fund will cease to exist as a separate fund.

In Denmark, ATP has taken an initiative to hush critics of its guarantee-based business model, launching an external evaluation process chaired by a former head of the FSA. But the monopolistic institution’s plan has been greeted with scepticism from people who say such scrutiny should have been done at greater arm’s length – by the government, for example.

Last week the DKK718bn (€96.2bn) pension fund reported a -0.6% loss on its leveraged investment portfolio for 2024, while the entire fund – including its hedging portfolio – returned just 1.8% after a year of surging equity markets.

Norway’s NOK20.2trn (€1.7trn) sovereign wealth fund also admitted missing out on some of last year’s stockmarket bounty because of asset allocation decisions.

“Insurance is always expensive if your house doesn’t burn down,” said NBIM CEO Nicolai Tangen at the central bank department’s annual results press conference in Oslo.

There he faced awkward questions about headline-grabbing text exchanges with Elon Musk, and said: “I need to be a bit more formal in our communications and I take that on board”. 

Items to note:

• Danish pension funds made a strong start to 2025 with an average return of 2.2% for January, according to independent consultant Nikolaj Holdt Mikkelsen, who has compiled a table of returns on LinkedIn.
• Allan Paldanius, director of the Finnish Centre for Pensions (ETK), is set to discuss the Finnish pensions reform recently agreed in a webinar in Finnish on Friday 14 February at 9am Helsinki time. 

Rachel Fixsen

Nordic Correspondent