Sweden's government has broadened a review of its national pension funds to look at increasing economies of scale among its AP funds, with one option to further consolidate the plans.
The government tasked an investigator in October with reviewing the operations of AP1, AP3 and AP4, Stockholm, and AP2 and AP6, Gothenberg, to modernize and streamline their management, said a translation of a news release.
That investigator has now also been asked to review how the three Stockholm-based funds can increase economies of scale, potentially by bringing them together into two plans. The government in October said it wanted the investigator to look at how AP6 could be integrated into AP2.
"The first, third and fourth AP funds, which manage part of the buffer capital belonging to the pension system, are relatively similar to each other," said Niklas Wykman, financial markets minister, in the translated release. "The investigator must look at the possibility of taking greater advantage of economies of scale, which could mean a significant increase for future pensioners."
The buffer funds cost up to 400 million Swedish kronor ($38 million) per year to operate, the release added.
The review is taking place within the Ministry of Finance, known as a "letter investigation." The investigator is Ministerial Councilor Tord Gransbo.
According to Pensions & Investments data, AP1 has $39.7 billion in assets; AP2 has $38.7 billion; AP3, $45.2 billion; and AP4, $43.3 billion. AP6 had 66.5 billion kronor in assets as of Dec. 31, 2022, according to its latest annual report.