Fee cap proposed for Sweden’s PPM
The Swedish Investment Fund Association has proposed that full rebates be given investors by managers charging more than 1% gross for fixed income funds and more than 2% gross for equity funds, where funds are distributed through the country’s PPM platform operated by the Swedish Pensions Agency.
The proposal comes in the Association’s response to the ongoing consultation being pushed by the Pensions Agency (Pensionsmyndigheten).
“The fee cap is intended to counter the introduction of new funds with gross fees that have been tailored for the Agency’s rebate system. these fund fees differ in many cases from market rate prices and therefore would not be able to be distributed in any other way than through the Agency’s platform,” the Association stated in its response.
“The Association therefore shares the view that all too high fees in the system damages trust in the premium pension and argues that a fee cap can be a way to correct the problem.”
It continued: “At the same time, the Association wishes to note that thanks to rebates the fund fees in the premium pension system are uniquely low. Nowhere else is it possible to buy funds at such low prices as when the premium pension savers invest their pension. Therefore the premium pension system and the rebate system must be defended to ensure that savers have as good a system as possible. There are also other adjustments that the Association sees as important. Among others, the Association believes that rebates should be calculated per fund and not per fund company.”
The PPM platform currently lists 844 funds, from which long term savers can self select funds if they do not want to invest in the default fund on offer – the AP7 fund.
Funds are regularly added to or removed from the platform, with the Pensions Agency maintaining a running information service online providing investors with updates. For example, it notified that Amundi added the Equity Europe Minimum Variance portfolio to the platform on 1 October.