The Swedish Investment Fund Association (Fondbolagens förening) has warned that “good funds” should not be excluded from the country’s key self-selection fund platform in the wake of proposed reforms put forward by the cross-party Pensionsgruppen in Parliament – responsible for proposing laws that affect the country’s long term savings pillars.
The parliamentary group has been focused on changing the Premium Pension (PPM) system, particularly its fund platform operated by the Swedish Pensions Agency, which has been subject to considerable criticism over the past year as long term savers’ money invested in funds has been put at risk by corporate mismanagement or outright crime such as fraud and theft.
Sifa chief executive Fredrik Nordström wrote in an open letter that the Fund Association broadly welcomes the proposals to strengthen consumer protection on the PPM fund platform. But he is more cautious on the proposals to introduce stricter criteria applied to funds seeking to distribute via PPM.
He writes that when it comes to drawing up the proposals for criteria “it is important that these are not formed to exclude good funds from the market”
“While at the same time it is important that funds have quality, it must be remembered that strong competition is the best guarantee for savers to access good and innovative fund alternatives.”
Nordström also notes that changes to the PPM platform alone are not enough to address some of the broader challenges faced by the pensions system. For low and mid-income earners he has said that there is a political imperative to stimulate savings, particularly to encourage private pension savings alongside workplace pensions. This would be particularly true for those who are not able to work longer, he suggested.
Coupled with the proposals noted above, Nordström also noted the imperative to push financial education in the country’s school syllabus.