Swedish pension company AMF has announced that it has converted SEK 5.6bn of existing surplus into strengthened guarantees.

AMF stated that its “strong financial position” had resulted in an opportunity to improve security for its customers with traditional insurance.

The reinforcement covers around 700,000 customers who receive their pensions from AMF.

The pension company said that the decision was part of its ambition to ensure a good balance between the opportunity for returns during pension saving and security during payouts.

“The majority of our customers save in or have their pension paid out from our traditional insurance,” commented AMF chief actuary, Roland Kristen.

“It is safe saving with a guarantee, where we take care of and invest the money so that it grows as safely and well as possible.

“Savings where the risk is adjusted depending on how long you save and how long you have until retirement.

“When the money we are responsible for grows thanks to successful asset management, a surplus arises, and to create a good balance between security and return, we then regularly convert surpluses into guarantees.”

Last year, the guarantee for paid-in premiums was increased by AMF to apply to 100 per cent of the payment, and it introduced a new guarantee enhancement model.

In 2023, SEK 9.3bn was converted to 660,000 customers who had a payment from old-age pensions and survivor’s pensions.

Furthermore, the guarantee is continually strengthened as the customer approaches retirement age.

“This is the second time we have applied our adjusted warranty enhancement model,” noted Kristen.

“The adjusted model means that, in addition to reducing the risk in connection with the start of the payments, we can also in a structured way ensure that the customers receive an adapted risk level throughout the payment period.

“The adjusted model applies to the payment of both an old-age pension and a survivor's pension from traditional insurance. The aim is to give our customers safer and more stable pension payments over time.”

Due to the strengthening of the guarantee, a larger part of the pension is guaranteed and the level of risk is reduced, while the size of current payments is not affected.

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