Here we have gathered information and documents regarding fund agreements.
The new fund selection agency for the premium pension
The Swedish government presented the new law containing reforms to ensure a safe and better premium pension, on December 22 2021.
The Swedish Fund Selection Agency is a new independent authority that will procure, manage, and review eligible funds in the Swedish Premium Pension System.
The agency will be responsible for selecting funds for the USD 200 billion premium pension fund platform. Operations will start in June 2022 and the first procurements of funds will take place the second half of this year. Recruitments to the new agency started in April.
In the film below, we talk about the operation where sustainability and high quality are some of the key words.
Film: A presentation of the Swedish Fund Selection Agency
In its capacity as host authority, the Swedish Pensions Agency is assisting with preparation and planning of the setting up of the agency to prepare for the establishment of the new Agency.
A new procured fund offering will provide a range of high quality procured and selected funds as well as safer pensions for pension savers. There will be a wide variety of funds to choose from, giving pension savers the flexibility to choose while the Agency takes responsibility for ensuring that the funds procured are cost efficient, sustainable, controllable, and of high quality.
The proposal for the new legislation (In Swedish):
Lagrådsremiss om ett bättre premiepensionssystem - Regeringen.se
FAQs on the new fund management agency for the premium pension
Why will a new agency for procured funds be established?
The Pension Group, which includes representatives from the political parties behind the current pension system, has agreed that the premium pension system should be retained but that the Government needs to take greater responsibility for the fund choice architecture and the structure of the premium pension system.
The aim is to ensure that the funds available in the premium pension provides high quality at a low cost.
The procurements shall always be carried out in the best interests of pension savers and pensioners. The Government and the Pension Group have decided that there should be a government agency with responsibility for procuring funds and managing the fund investment offering within the premium pension system.
The agency shall take an independent position and shall deal with its remits based on principles established in law. The agency’s board shall not be subject to political influence, and the Government will not therefore be able to influence the choice of available, sou.gov 2018:06.
What will the new agency do?
The Agency will procure a wide selection of high-quality funds with different risk profiles, in accordance with the new law on procuring funds for the premium pension.
The Agency will enter into fund agreements in accordance with the same act. These procurements shall be carried out professionally and based on good industry practice. The Agency shall ensure through the procurements that pension savers get genuine freedom of choice, while at the same time it shall be possible for fund managers and funds to be reviewed in a secure and cost-effective manner.
It will also be responsible for phasing out the current fund offering and how the premium pension fund agreements will be transferred to the new fund market.
The legislation that will govern the agency's overall objectives and principles is defined in the law and will be determined by the Riksdag in the spring of 2022. We will continue to update with new and updated information.
Will the transition to the new Board mean that fund managers and funds located on the currently connected fund market need to apply for a new fund agreement?
It will not be required to sign a new fund agreement connection with the transition to the Agency. The current fund agreement with the Swedish Pensions Agency will be transferred to the new Agency, and will apply until a fund category has been the subject of procurement.
After the procurement of a fund category, the current fund agreement will be terminated and the Agency will then enter into new fund agreements with the new and procured fund managers who have been selected in a procurement process, based on the award criteria set, defined and decided by the Agency based on the new law's framework and requirements. The procured funds will replace the current funds on the platform.
What is the premium pension?
The premium pension is a part of the general pension and therefore a form of social insurance designed to provide financial security in old age. For the individual, the premium pension system involves depositing a payment corresponding to 2.5 percent of the pension base in a premium pension account with the Swedish Pensions Agency that is linked to the individual.
The Swedish Pensions Agency is the insurer for premium pensions. The premium pension is invested in funds; either savers and pensioners choose mutual funds from the fund market now provided by the Swedish Pensions Agency, or in the pre-selection alternatives of the Seventh AP Fund.
What is the difference between the current fund offering and the new structure?
The current fund market is application-based, which implies that fund managers must apply to the Swedish Pensions Agency to provide a fund on the fund market. If the fund manager meets the criteria’s, the fund management and the Swedish Pensions Agency enter into a fund agreement, and the fund becomes eligible for the fund market.
The new fund management offering will be procured in line with special fund procurement standards, which will be governed by legislation and described in the government’s proposal. This means that various types of funds will be made available and that conditions are imposed on both the fund manager and the fund. The funds will be assesses based on requirements regarding suitability, ability, quality, performance, sustainability, and costs.
The funds that best meet the evaluation criteria established in each procurement will be chosen and may enter into fund agreements with the Agency. The Agency will evaluate and monitor the funds on an ongoing basis.
This means that current fund categories, as well as the number of funds procured within each category, may vary and change over time.
What is the status of the management recruitment for the agency?
The board members are the overall management of the agency. The members of the board are selected by the government.
How many people will work for the new agency?
We are unable to respond at this time. A good prediction is between 15 and 25 persons, although this will become apparent in the spring after we have developed the organization and finalized the overall governing documents. The Swedish Pensions Agency will continue to serve as the host authority and will therefore oversee certain administrative functions on behalf of The Agency.
When will the new agency be in place?
The new agency will be established in June 2022, with the Swedish Pensions Agency as the host agency.
When will you advertise job vacancies?
After the Swedish Parliament (Riksdag) has approved the proposal, vacancies will be posted on the Swedish Pensions Agency's website and the new website of the Agency, which is not yet in operation.
Where will the new agency be based?
Botkyrka will be the location. During the transition period, office space in Stockholm will be available to enable continuation in existing businesses.
What preparations are made?
We will plan and carry out actions that will allow the new Board to begin operations in June 2022. Priority tasks include planning how the new core business associated with fund procurement will be created. We also set up offices and administrative support, as well as prepare for the start of the Agency’s operations.
What does the current premium pension fund platform look like?
There are approximately 475 funds to choose from in today's fund offering. These funds collectively manage over SEK 960 billion of Swedish premium pension capital.
On the fund market, there are approximately 7.5 million savers.
What is happening with the information transferred from the Swedish Pensions Agency?
The New Agency will take responsibility for overseeing the current fund offering and will continue the process of examining, assess, and evaluate the funds on the platform. The current agreements will be gradually terminated over a multi-year period and replaced with new funds obtained.
Pensioners and pension savers will continue to communicate with the Swedish Pensions Agency on fund information and selection.
What is happening with the funds a saver has chosen for their premium pension?
Nothing happens in the first stage. A saver retains his or her chosen funds and can make changes to them in the same manner as previously.
If the saver has chosen a fund that is not available on the fund platform after a specific procurement of the relevant fund category has been completed, for example, because the fund manager chooses not to participate in the procurement or is not chosen and thus does not continue to exist on the fund market, the Swedish Pensions Agency will contact the saver with information about the newly procured funds, what the options are for the saver, and what happens if the saver chooses not to do an active choice.
For a time, there will be funds in the fund offering accordance with current restrictions (which will eventually expire) as well as funds that have been procured in compliance with the new law.
What is happening with the funds/fund managers that currently have fund agreements with the Swedish Pensions Agency?
The Swedish Pensions Agency's fund agreements with fund managers will be transferred to the Agency and will, as a starting point, continue in their current form and any amendments. As new fund categories are procured, the previous agreements will be cancelled and replaced with the new fund agreements.
Which funds will be in the new procured fund offering?
According to the proposed law, the fund offering must provide a variety of funds that are relevant and fit for the premium pension system with varying risk levels and investing orientations, allowing for true freedom of choice. The funds must be efficient, long-term, manageable, and of good quality.
Mutual funds, fund companies, special funds, or specific alternative investment funds can be considered for the fund platform for the premium pension, the details will be decided by the Agency.
The Agency will establish a more precise framework for, among other things, suitability criteria for funds, categories, and the qualitative criteria for procurements based the proposed law.
Will funds currently on the platform have an advantage or will they be treated independently when the Agency procures funds?
No, all fund managers who submit tenders in a procurement will be treated equally. The Agency can according to the new law. only consider the requirements for high quality, controllability, sustainability, and cost efficiency. Fund managers who do not now have their funds on the platform but want to participate in a procurement do not need to register their funds to the current fund platform in order to participate in a future procurement.
Which fund categories will be procured?
The fund categories will be determined by the Agency after it’s been installed. The fund categories may vary over time, as requirements and demand from the savers evolve.
On the fund platform, there will be freedom of choice, which implies that the selection of funds must be broad enough to satisfy most pension savers who want to make their own choice of funds.
How do I become aware that a procurement is being carried out?
There will be no procurements launched before The Agency is established in June 2022. We will follow up with more details on where and how information about forthcoming procurements is distributed. The agency will communicate the procurement plans on its future website and through advertising.
What requirements will be placed on the funds that The Agency is to procure?
The requirements imposed on fund managers and funds will most likely differ between procurements and between different fund categories. This will be determined by The Agency based on the new law.
After the authority starts in June, The Agency will decide on more comprehensive definitions and descriptions. The Agency will provide further information in addition to the legal guidance.
Will there be requirements for sustainability?
Yes, the SOU 2019: 44 law proposal states that the finances must be sustainable. The Implementation Committee is now working to provide ideas for The Agency on sustainability principles, criteria, and standards for funds and fund managers.
Contact information for fund managers
Fund department
Acting Director of Fund department: Elin Berglöf
Telephone number: +46 10-454 46 53
E-mail: elin.berglof@pensionsmyndigheten.se
Fax: +46 8 658 13 30
Address information
Pensionsmyndigheten
Att: Fondtorgsavdelningen, Box 38190, 100 64 Stockholm
Visit us: Hornsgatan 168, Stockholm
Fund selection and compliance unit
Head of unit: Magnus Strömer
E-mail: magnus.stromer@ftn.se
Queries regarding fund agreement, enrolment of funds and legal issues:
duediligence@ftn.se
Fund information unit
Head of unit: Estrella Zarate
E-mail: estrella.zarate@pensionsmyndigheten.se
fondfraga@pensionsmyndigheten.se
Fund administration
Head of unit: Rasmus Bjälkeson
E-mail: rasmus.bjalkeson@pensionsmyndigheten.se
Queries about daily trading, Focus, contract notes, NAV reporting, payments etc:
fundadmin@pensionsmyndigheten.se
fundinvoice@pensionsmyndigheten.se
Fax: +46 8 658 13 30
