PPM grows pension pots faster, says Sifa

Data published in the latest annual update on the premium pension system by the Swedish Investment Fund Association suggests that long term savings via PPM grow faster than savings made via other pillars in the country’s pension system.

The report – Fakta om premiepensionen 2018 – states that returns in the PPM system since its launch and through 2017 have been significantly better than from the income pension: 7.1% versus 3% on average annually.

There is a significant level of ongoing interest in the ability to self select funds, with about half of savers, accounting for some 70% of managed assets, having selected funds themselves. And a significant majority of younger people in the 18-33 age bracket appreciate the ability to self select. (See table below, which outlines the proportion of self selected portfolios in the PPM system by age groups; the source is the Swedish Pensions Agency, the statutory authority tasked with overseeing the PPM fund platform.)

About 99% of savers saw a positive return on their premium pension account in 2017, Sifa’s report notes.

And the average management charge in the PPM system is 0.22% after two-thirds of the gross fees have been rebated.

PPM changes

Other recent comments from Sifa regarding the future of PPM have focused on the new regulations coming into effect soon, which are intended to increase the level of consumer protection for those using the system. A number of scandals, including the use of EU passporting rules to effectively place funds on the PPM platform to then funnel money out of Sweden, have led the government and Parliament to enact stricter rules around the types of funds and fund mangers that are authorised for distribution via the platform.

Sweden’s PPM platform changes queried by local Fund Association

New rules announced for funds seeking PPM distribution – commission banned

Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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