The Swedish pension funds AP1 – AP4 and AP6 have made a “positive contribution” to the long-term financing of the general income pension system following historically high returns in 2021, the Swedish government has said.

In a letter to the Riksdag, the Ministry of Finance detailed its evaluation of the AP funds’ operations since 2001 and assessed their performance in 2021.

It noted that the total result for the funds amounted to SEK 338bn after costs, which represented a return of 20.2 per cent.

The average return for the funds has been 7.1 per cent per year since the current pension system was introduced in 2001.

At the end of 2021, the AP funds’ total capital was SEK 2,004bn, a year-on-year increase of SEK 308bn.

The government’s evaluation stated that the buffer funds had achieved their long-term return targets, which are set by their individual boards.

The Ministry of Finance added that AP1, AP2, AP3 and AP4 had fulfilled their roles as a buffer by managing current contribution funds and payments on behalf of the income pension system.

“The funds have had the payment readiness needed for the task,” the letter stated.

In 2021, the net flow between the first – fourth AP Funds and the income pension system after administration costs was SEK 31bn, SEK 2bn less than the previous year.

Last month, Sweden’s Minister of Finance, Max Elger, praised the first to the fourth AP funds’ work on sustainability at an open hearing on sustainability with the CEOs of the funds.

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