AMF Pension issues warning on Swedish reform
SWEDEN - The Swedish pension fund AMF Pension argues that the recent pension reform will fail if the government does not put more resources into pension education and information.
AMF says the Premium Pension Authority (PPM) system - put in place in 2000 to give more saving responsibility to individuals - has been met with little interest.
Since the PPM reform, which has served as a model for the proposed personal accounts in the UK, was put into place "the proportion of active savers has decreased," the fund said.
It added that in about five years, more than half of the people in the system will not have made a choice.
This comes down to a lack of education and information according AMF, which made several recommendations to the government with regards to education and information today, a spokesman told IPE.
"Roughly 100,000 Swedes enter the system every year, and only 8% of these are active, meaning that they choose a fund themselves for the money that goes into the system," the spokesman said.
He added: "If you don't make choice the money is put into a government fund," which in effect is going back to the state managed system before the reform.
According to AMF's forecast, if the government does not take action passive savers will exceed 60% in 2030.
"AMF Pension urges politicians to undertake a systematic initiative to disseminate information about pensions," according to the fund already in schools children should be educated about pensions.