Swedish finance minister criticises fund bosses’ remuneration

Anders Borg, Sweden’s minister of finance, has criticised the appointment and remuneration structures of the country’s AP funds.

In a report delivered to Sweden’s Parliament, the government said that the rules governing the so-called buffer funds in the country’s long term savings system – particularly AP1-4 and AP6 – have performed well in the past decade.

At a time when returns from equities were volatile, the funds learned to look to other asset classes to manage risk and still produce real returns.

However, the report stated that the government remains seriously concerned about the fact it is not possible to judge whether rules on employment, appointments and remuneration are being followed by the funds. As those working for the funds are technically state employees, their remuneration should be in line with those appointed to other financial services related authorities, such as the central bank.

“The government therefore assumes that the funds will move quickly to make available the basis on which remuneration is awarded those employed,” the report stated.

“Just as in any other activity of the state, the remuneration for employees should be reasonable, balanced, and moderate. This is important to secure trust in the AP funds and ultimately for the pension system,” said Anders Borg.

The criticism follows last week’s surprise appointments to senior positions on a number of AP funds by Peter Norman, minister for financial markets.

He announced 16 appointments to the AP1-4, AP6 and AP7 fund boards, including three new chairs. Among these was Pär Nuder, a former minister of finance between 2004-6.

Norman was also forced to announce the resignation of the deputy chair of the AP6 fund, Jan Kvarnström, because the government had previously failed to note he was no longer domiciled in Sweden – a requirement by law to be an AP fund board member.

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