Sweden Opens $155 Billion in Pension Cash to Greater Risks
Sweden’s $155 billion AP pension system was given the go ahead to cut its bond holdings and invest more in private equity in a bid to boost returns and safeguard retirement funds.
The new rules for AP1, AP2, AP3 and AP4 will require the funds to hold 20 percent of their assets in the safest bonds, down from 30 percent, the Finance Ministry said in a statement Friday. The proposal also does away with a 5 percent limit for non-listed investments and puts in place a cap on “illiquid” investments at 40 percent of their portfolios.
“This will increase the possibility for good returns and good pensions, especially considering the current low interest rates,” the ministry said.
The AP funds together manage about 1.3 trillion kronor ($155 billion) and have had a return of 5.6 percent per year since 2001, according to the government.
Full Content: Bloomberg
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