EUROPE - AP1, one of the Swedish national buffer funds, posted net investment income of SEK2.3bn (€247m) after expenses, representing a total return of 1.1% during the first six months of the year.

Total expenses in the first half of 2010 amounted to SEK146m.

Measured in relation to the average value of the fund's net assets, this represents an annual expense ratio of 0.14%.

Of this total, operating expenses accounted for SEK88m, which is equal to an annual expense ratio of 0.09%.

Commission costs for the six-month period totalled SEK58m, or an annual expense ratio of 0.06%.

The promised cost savings of at least SEK100m will be reached through lower operational expenses (approximately SEK45m), lower commission costs (SEK35m) and lower transaction costs (more than SEK20m).

Net assets under management rose by SEK300m to SEK202.6bn.

Net assets have been affected partly by the investment earnings of SEK2.3bn, but also by the period's net outflow of SEK2bn into the pension system.

Meanwhile, Adam Lauren has been appointed as interim chief executive of AP6, another of the Swedish national buffer funds.

Lauren is currently head of administration and CFO at AP6.

Departing chief executive Erling Gustafsson said in the spring he would continue in his role until a new head had been found, but has now requested to be relieved of his duties.

In other news, Swedish regulator Finansinspektionen has ordered F&C Asset Management to pay SEK1.4m because of repeated late reporting of changes to its ownership in Zodiak Television.

The decision revealed the late reporting was due to "unusual technical errors", which have now been rectified.

And according to a study conducted on behalf of Collectum, eight out of 10 private sector employees are happy with the choice available to them for their supplementary occupational pension system ITP.

Jenny Jeppson, head of communications at Collectum, said the study showed the majority of the participants preferred a quality-controlled offering with low fees rather than a broader range of providers.

Some 82% of respondents said it was fairly good or very good that Collectum selected the providers eligible to manage the occupational pension assets, whereas 12% felt it was fairly bad or very bad.

Another survey by Collectum showed that, depending on political views, people have very different ideas about when they think they will retire.

Those voting for The Christian Democrats are the most optimistic, with 36% thinking they will retire before 65, whereas the Green Party voters seem most pessimistic, with only 14% believing they will retire before 65.

SPP, the pension and insurance provider, is going to start making a climate profile on the companies in which it invests.

Being one of the largest pension providers in Sweden, SPP said it was important it did not invest in companies with a bad climate profile.

In analysing companies, SPP will evaluate the strategic understanding of the challenge of climate change and how well in practice the companies add to the problem or are part of the solution.

The analysis also focuses on whether the companies understand how the climate challenge affects the company, how large their emissions are, if they have a reduction target in place and how they will achieve these goals over time. 

In addition, SPP wants to find out whether the companies are focusing on products, services and research that aim to reduce climate change.

And lastly, online pension calculators on banks' websites provide misleading information on the statutory earnings-related pension, according to a study by the Finnish Centre for Pensions (ETK).

Banks that market individual pension insurance policies and long-term pension savings accounts use mechanical calculation methods, based on which the notion of a person's future earnings-related pension is usually overly pessimistic. 

The study shows banks' online pension calculators do not generally take into account the length of a person's career and the already accrued pension.

Furthermore, most calculators project the future statutory earnings-related pension mechanically, either by cutting the gross salary in half or by using an even smaller coefficient.

Because online calculators do not take into account the variables affecting the earnings-related pension, the assessment of the future pension cannot be accurate.

Nor do online calculators of banks forecast the development of the income level, resulting in low pension estimates for the younger participants in particular.

ETK said: "From the point of view of consumer protection, it is important the customer be able to decide on a long-term investment based on information that is as reliable as possible.

"Accurate information on the level of the statutory earnings-related pension constitutes significant basic information for a customer considering pension saving.

"Therefore, it is important to know how successfully the various calculators evaluate the statutory pension provision."
 

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