AP Funds strengthen the Swedish income pension system by adding SEK 142 billion
The First-Fourth AP Funds performed well in 2023 and strengthened the financial position of the income pension system by SEK 142 billion. The result corresponds to an average return of 8.1 per cent. At year-end, the four funds managed total assets of SEK 1,880 billion. The net payments of the AP Funds to the pension system totalled SEK 19 billion. This contributes strongly to the stability of the income pension system and its mission to maximise benefits for current and future pensioners.
The average return for the year was 8.1 per cent after costs. The average return of the AP Funds over the last five and ten years amounts to 8.5 and 8.0 per cent per year, respectively, compared with the income index’s performance of 3.5 and 2.8 per cent per year over the corresponding periods. The income index is used to calculate pensions and pension rights in the income pension system. When the returns of the AP Funds exceed the performance of the income index, the AP Funds contribute to the strength of the pension system.
At the end of 2023, the total fund assets of the AP Funds amounted to SEK 1,880 billion. During 2023, the AP Funds paid out SEK 19 billion to cover the pension system’s deficit. Since they were launched in 2001, the AP Funds have made net payments of SEK 272 billion to the pension system. At the same time, their returns have contributed to the financial strength of the pension system, and the AP Funds’ share of the pension system now accounts for almost 16* per cent of pension assets, compared with 10 per cent in 2001.
The AP Funds conduct cost-effective management that provides good returns after costs and also builds confidence in the AP Funds as the authorities for and managers of public pension funds. In 2023, total management costs amounted to 0.08 per cent of assets under management. The AP Funds are cost-effective in international benchmarking.
During the year, the AP Funds continued with their efforts to achieve portfolios with net zero emissions. In 2023, the carbon emissions of the portfolios were reduced by a further 8 per cent.
Kristin Magnusson Bernard CEO AP1, Eva Halvarsson CEO AP2, Staffan Hansén CEO AP3 and Niklas Ekvall CEO AP4 make a joint statement:
“Our collective result for 2023 shows that all of us, with our different management strategies, navigated well in unsettled financial markets and can summarise a stable year. This means that the AP Funds have made a strong contribution to the stability of the pension system. From a 10-year perspective, the return has been high, averaging 8.0 per cent per year, compared with the average increase of 2.8 per cent per year for the income index. We are recognised internationally as a role model in sustainability and have continued to develop this important aspect via both responsible investment and responsible ownership.”
* According to Swedish Pensions Agency Annual report 2023 (total fund capital from AP1, AP2, AP3, AP4, AP6)
More information is available in the annual reports and sustainability reports published by the AP Funds, see links below.
For more information, contact:
Sara Christensen, Head of Communications, AP1, sara.christensen@ap1.se
Ulrika Danielson, Head of Communications, AP2, ulrika.danielson@ap2.se
Lil Larås Lindgren, Head of Communications AP3, lil.lindgren@ap3.se
Karoline Hammar, Head of Communications, AP4, karoline.hammar@ap4.se
The AP Funds (AP1-AP4)
The AP Funds manage the buffer capital in the national pension system on behalf of the Swedish Parliament and the Swedish people, for the benefit of current and future pensioners. The AP Funds are required to manage their assets in an exemplary way through responsible investments and ownership. Particular attention is paid to how sustainable development can be promoted without compromising the overall objective of maximising the benefits for the pension system. The AP Funds all have the same mission but different management strategies, and are governed by the National Pension Funds Act (2000:192).
