Swedish pension provider AMF reported a total return of 8.6 per cent in the first three quarters, January to September, of 2024, it has revealed.

This can be compared to the average annual returns, which over the past five years was 6.6 per cent, 6.9 per cent over the past ten years and 7.2 per cent over the past 15 years.

AMF revealed it had a solvency ratio of 224 per cent at the end of September. The pension provider’s management cost for traditional insurance amounted to SEK 0.11 per SEK 100 in assets under management (AUM).

The premiums written amounted to SEK 27.5bn, while premiums for unit-linked insurance, reported as deposits in investment agreements, amounted to SEK 2.2bn.

The provider said this “sharp increase” was partly explained by the fact that Fora has switched from annual to monthly payment of premiums.

AMF CEO, Tomas Flodén, said that despite an “uncertain” and at times “turbulent” autumn, AMF achieved a “strong” total return of 8.6 per cent to its savers during the first nine months of the year, meaning a value growth of just over SEK 50bn in its pension portfolio.

Flodén also poined out that, for those customers who can take a “slightly” higher risk, those who work and pay into their pension, the return was 9 per cent.

“Creating as high a return as possible for our more than four million savers is important. I am pleased that during the year we have also been able to improve the security of a significant part of our payment customers through strengthened guarantees,” he added.

“Low fees are also absolutely central to a good occupational pension, and therefore I am also pleased that by working smartly and efficiently, we have laid a solid foundation for being able to provide our core customers with the lowest possible fee in the future as well."

Equities accounted for the “strongest” performance during the third quarter with a return of 16 per cent.

However, all asset classes developed “positively” and contributed to AMF’s “good” total return of 8.6 per cent, as the return on AMF’s alternative assets was 3.4 per cent and its fixed-income assets were 4.3 per cent.

Commenting on the results, AMF head of asset management, Katarina Romberg, said in a situation where there is “great uncertainty" about both economic and geopolitical developments, it was “a strength to have such a well-diversified portfolio as AMF has”.

“The fact that we are financially strong with industry-leading solvency also gives us a great deal of freedom of action going forward, regardless of the pace of the economic recovery,” she added.

“I am also pleased that our fund customers have had a positive development during the year, with an average total return for AMF's fund portfolio of 13.7 per cent during the first nine months of the year, while the entrance solution in our unit-linked insurance had a return of 16.2 per cent."

In addition to its results, AMF shared research looking at what makes people move their occupational pensions, revealing that 18 per cent of people who have moved their occupational pension from AMF had done so to get a discount, compared to 14 per cent last year.

The survey suggested that 'conditional offers', such as a discount on the mortgage or a full-customer discount, were becoming increasingly common in connection with people moving their occupational pension.

Furthermore, of the savers where the choice to move their occupational pension came from a financial entity, one in three (33 per cent) said it was in connection with discussing mortgages, compared to 24 per cent who said the same last year.  

The survey also revealed that for more than one in three (35 per cent) customers, it was the bank that raised the idea of moving their occupational pension, a figure that has increased from 25 per cent last year.

AMF deputy CEO and chief of staff, Malin Omberg, said the occupational pension was an “important” benefit and a part of one’s future livelihood, arguing that the fact that it was increasingly seen as a commodity to be exchanged for temporary discounts, such as slightly cheaper mortgages or a small discount on home insurance, was a “problematic” development.

“This reduces the value of the benefit itself, but it also risks leading to more savers actually receiving poorer pensions than they would otherwise have received,” she added.

The research also found that less than half compared different alternatives before moving their occupational pension, as 23 per cent said they made their own comparison before moving and 28 per cent said they received help to make a comparison.

Meanwhile, almost half (49 percent) said they have not made any comparison at all.

“The fact that almost half do not even compare before choosing to move their occupational pension is a sign that the occupational pension is being treated too lightly, both by savers but above all by those who initiate a move,” Omberg said.

She said that this increasing normality was something that needed "reflection from everyone who is part of the Swedish occupational pension model".

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