Here we have gathered information and documents regarding entering into fund agreements, Application to enter into a fund agreement
The Swedish Pensions Agency's fund platform and the premium pension system
Premium pension is part of the public pension in Sweden and thus a social insurance with the purpose of guaranteeing financial security in old age. The Swedish Pensions Agency is the insurer for the premium pension. This assignment includes, inter alia, managing both a premium pension fund platform and the pension savers' accounts.
For the individual, the premium pension scheme is a compulsory pension savings system where a sum equivalent to 2.5 percent of the pensionable income is deposited annually into a premium pension account linked to the individual. However, the Swedish Pensions Agency is the shareholder in the funds.
Anyone with pension savings within the premium pension system can choose to have their premium pension capital invested in up to five different funds on the Swedish Pensions Agency's fund platform. For those who do not make an active choice of funds, the premium pension capital is invested in the national default option, AP7 Såfa.
The Swedish Pensions Agency applies a ceiling on fund fees. For funds with a higher fee than the ceiling level, this is adjusted retrospectively according to the price reduction model set out in the fund agreement.
At the end of 2020, the market value of the fund platform was just over SEK 1,500 billion and it is estimated to grow to over SEK 5,000 billion by 2040.
The premium pension fund platform is regulated through agreements
The Swedish Pensions Agency’s Fund Department handles administration and trading in fund units. Other tasks include informing premium pension savers about the funds, reviewing fund managers' applications to enter into fund agreements, and ongoing review of fund managers and funds eligible on the fund platform.
There are certain requirements, both regulatory and contractual, to enter into and maintain a valid fund agreement. The purpose is to curb abuse and ensure consumer protection.
The Swedish Pensions Agency does not exercise formal supervision over fund managers but is tasked with ensuring that funds and fund managers comply with the terms and conditions set out in the fund agreement.
Fund platform auditing
Auditing the fund platform includes:
- review of application to enter into a fund agreement
- ongoing review of regulatory requirements and fund agreement compliance annual review of fund managers and funds
- quarterly review of funds
- thematic reviews
- case management (e.g. fund events)
- administrative controls
- ongoing review of fund managers' information on the Swedish Pensions Agency's website.
Fund managers who want to offer a fund on the Swedish Pensions Agency's fund platform
A fund manager who wants to offer a fund on the Swedish Pensions Agency's fund platform must apply to do so by filling in the application form established by the Swedish Pensions Agency.
The Agency's processing and assessment of the application is carried out within the scope of administrative proceedings and begins when the application fee has been paid to the Agency, and a complete application form with requested appendices has been submitted to the Swedish Pensions Agency.
The review focuses on whether the fund manager and the fund meet the requirements set out in law and in the terms of conditions of the Agency's standardised fund agreements.
Processing time may vary, for example depending on whether the fund manager already has a fund agreement regarding another fund, the Agency's workload, and how quickly the applicant fund manager submits additional information requested by the Agency.
Requirements for being on the fund platform
In order to participate in the premium pension system's fund offering, the fund must be registered with Finansinspektionen, the Swedish financial supervisory authority, and meet the requirements of the UCITS Directive (2009/65/EC).
Furthermore, in order for the Swedish Pensions Agency to approve a fund manager's application, it is required, inter alia, that:
- the fund manager meets the statutory requirement regarding business history
- the fund meets the requirement regarding track record
- the requirement regarding minimum assets under management outside the premium pension system is met
- the fund manager submits and undertakes to submit certain information
- the fund manager complies with the statutory requirements regarding fees and costs, and
- the fund manager and the fund otherwise comply with the terms and conditions of the fund agreement as determined by the Swedish Pensions Agency.
When a fund agreement has been concluded
If an application is granted, a fund agreement is concluded and the process of registering the fund on the Agency's fund platform begins. Once a fund agreement has been concluded, the parties' relationship is governed by civil law. In order for the fund to become eligible, the fund manager must first fulfil their administrative obligations pursuant to the fund agreement and, for example, provide certain information about themselves and the fund through the Agency's system.
More information about who can apply and how it works can be found in Chapter 64 of the Social Insurance Code, Regulation (2018:1302) on premium pension, the Swedish Pensions Agency's regulations on the fund manager's application to enter into a fund agreement (PFS 2018:5), and the document Instructions for the application. For more information about the terms and conditions, please see the fund agreement and the document Instructions for the fund agreement.
