Swedish Fund Selection Agency to begin premium pension fund procurement in spring

The Swedish Fund Selection Agency (SFSA) has announced that it will begin to procure investment funds to replace the existing fund agreements for the country's new premium pension fund platform in spring 2023.

The government agency was set up in the summer of 2022 and is set to start the tendering process on several asset classes from next year.

Its aim is to complete around 30 procurements for the new defined contribution (DC) premium pension platform between spring 2023 and the middle of 2025.

The agency acknowledged that this timescale was an “ambitious pace” but that the focus will “always remain on quality”.

The asset class categories that will be procured first are: European equity (active and index), global equities (index), Nordic equities (active) and global fixed income.

In a status update, the SFSA stated that it had a mandate to procure, monitor and quality-ensure the funds in the Swedish premium pension system.

Its aim is to provide funds of higher quality to provide a “safer and higher pension for savers”.

“The work to establish the new government authority started in 2017 with the pension agreement,” the SFSA said.

“It was decided that the future range of funds on the fund platform should be of high quality and be secured by a thorough procurement, with the aim to procure the best funds and fund managers to the platform.

“The laws that govern the authority and the future procurements aim to create a reliable range of funds of high quality. The procured funds on the new fund platform should be suitable for the system, cost-efficient, sustainable, controllable and of high quality.

“The premium pension system and the fund platform should be characterised by freedom of choice, where the saver has the option to choose the level of risk and investment strategy.

“The interest of the savers is the main focus when the new fund platform is procured.”

The premium pension system, which was launched in the late 1990s, currently has assets of around €200bn.

However, with inflows larger than outflows, the agency expects that assets will increase to around €400bn by 2040.

In the procurement process, once quality has been evaluated, the SFSA will focus on four areas: Investment philosophy, investment process, investment resources and investment results.

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