The Swedish Fund Selection Agency (FTN) is planning to give notice for the upcoming procurements of global and European index funds for the premium pension fund platform at the end of February.

FTN previously announced that it would give notice of the procurements in early 2024, with changes in the procurement specifications to be communicated when notice is given.

FTN’s first procurement for the premium pension fund platform was announced in July, with the series of procurements aiming to create a more secure premium pension system with higher pensions for participants.

The preparatory work for the latest round of procurements is now in the final stages and projected to be finished by the end of the month.

At the end of November, FTN presented a preliminary procurement specification for the procurement of global index funds, opening the possibility for market dialogue.

The final procurement specifications will be presented when notice of the procurements is given.

Since 20 June 2022, FTN has represented the Swedish Government in relation to the fund managers that previously signed fund agreements with the Swedish Pensions Agency.

Fund agreements signed prior to 20 June 2022 remain in effect until termination occurs, therefore, throughout the transitional period, funds covered by existing fund agreements and funds covered by newly procured fund agreements will coexist.

When a fund agreement expires, the premium pension monetary funds shall primarily be transferred based on the saver's new choice or alternatively to a fund that is equivalent in essential respects to the previously chosen fund.

However, transfers to an equivalent fund can only occur based on criteria and conditions within the framework of each individual procurement.

In the absence of an equivalent fund and an established distribution scheme enabling the transfer to a specific fund, the assets will be transferred to either AP7 or the saver’s new choice.

“One relevant scenario is in the case of a fund merger through absorption,” FTN noted. “As the transferring fund dissolves upon completion of the merger, the fund agreement for the transferring fund will also terminate at the latest by that time.

“Consequently, the premium pension monetary funds in the transferring fund will generally be invested in AP7 Såfa.

“If the acquiring fund is covered by a fund agreement, FTN ensures that post-merger, the fund aligns with the fund agreement's conditions for continued coverage.

“This includes ensuring that the investment policy, risk level, and objectives do not change due to the merger or that the fund agreement for the fund in other aspects remains unaffected.”

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