Premiepensionssystemet

Premiepensionssystemet is a component of the Swedish public pension (allmän pension). It was introduced in the mid-1990s as part of a reform of the pension system, separating a portion of pension contributions into a personal investment account. In the premium pension, 2.5 percentage points of the income pension are paid into a personal investment fund chosen by the individual from a public selection of funds. The remaining parts of the pension go to the income pension.

Funds and choice: Participants select from a broad range of investment funds with varying risk and fee profiles. The funds are managed by private fund managers but are offered and regulated within a state framework. A default option, AP7 Såfa, is used for those who do not actively choose a fund.

Administration and switching: The fund selection and any changes are made through an official online platform. Individuals can switch funds to adjust risk exposure and potential return; changes are subject to the platform’s rules and any applicable fees.

Investment regime and retirement outcome: The amount accumulated in the premium pension depends on fund performance, fees, and total contributions. At retirement, the premium pension is paid as part of the public pension and is separate from the income pension. The final pension result thus reflects investment outcomes, costs, and the chosen fund strategy over time.

Criticism and reform: The system has faced critique regarding fund fees and performance differences between funds. Debates and reforms have focused on cost transparency, simplified guidance for savers, and improved guarantees or default options to aid decisions.

See also: allmän pension, inkomstpension.