1. UK Visit Feb 2006 1 THE SWEDISH PREMIUM PENSION SYSTEM Daniel Barr, Chief Economist

2. UK Visit Feb 2006 2 DISPOSITION From DB-land to DC-country Activity Performance

3. UK Visit Feb 2006 3 FROM DB TO DC

4. UK Visit Feb 2006 4 FORMER STRUCTURE First PillarSecond PillarThird Pillar Occupational schemes (DB, 90% coverage) Tax efficient individual pensions (incl. mutual funds, unit linked) AFP (flat rate pension) ATP DB PAYG (related to 15 best income years)

5. UK Visit Feb 2006 5 REFORMED NATIONAL PENSION SYSTEM Premium pension (DC,funded) 2,5% Income pension (NDC, PAYG) 16 % Guaranteed pension (filling up)

6. UK Visit Feb 2006 6 INCOME PENSION PAYG ”Notional DC” Contribution 16 percent of capped income. Paid into individual notional accounts and indexed to average earnings

7. UK Visit Feb 2006 7 THE SWEDISH PENSION SYSTEM First PillarSecond PillarThird Pillar Tax efficient individual pensions (incl. mutual funds, unit linked) Occupational schemes (90% coverage, to a larger extent DC) Income Pension (PAYG) Premium Pension (DC, funded) Guaranteed Pension (filling up) Members choice

8. UK Visit Feb 2006 8 PREMIUM PENSION Individuals can choose maximum 5 mutual funds Default fund invest on behalf of passive individuals

9. UK Visit Feb 2006 9 ”The Clearinghouse Model” Fund Fund manager PPM Approx. 5,7 million pension savers

10. UK Visit Feb 2006 10 OPEN ARCHITECTURE Meet the requirements in the UCITS- directive (85/611/EEG) 780 funds 83 fund companies

11. UK Visit Feb 2006 11 ACTIVITY

12. UK Visit Feb 2006 12 NEW COMERS Proportion of new members that made an active choice Year2000200120022003200420052006 Active67,0%27,6 %14,1%8,3%9,4 %8,0%7,4 %

13. UK Visit Feb 2006 13 SAME TREND IN OCCUPATIONAL SCHEMES 60% 33% 24% 23% 22% 17% 31% 29,7% 27,70% 23,90% 17,60% 14,10% 8,40% 9,40% 64% 36% 34% 61,5% 65,10% 0% 10% 20% 30% 40% 50% 60% 70% 1998199920002001200220032004 SAF/LO PFA-98 Premiepension PA03

14. UK Visit Feb 2006 14 Active members share increases

15. UK Visit Feb 2006 15 ACTIVITY IN 401k-PLANS

16. UK Visit Feb 2006 16 FUND SWITCHES

17. UK Visit Feb 2006 17 Top ten funds 2006 (2000) FundMarket ValueMarket Share 1 (1)Premiesparfonden (Default)78 857 410 99529,5% 2 (5)AMF Pensions Aktiefond - Sverige9 210 050 1303,4% 3 (3)AMF Pensions Aktiefond - Världen7 905 309 7783,0% 4 (6)Didner & Gerge Aktiefond7 060 960 5582,6% 5 (4)Robur Aktiefond Pension7 032 194 8902,6% 6 (9)SPP Generation 60-tal5 072 854 5621,9% 7 (8)SPP Generation 50-tal4 675 274 8821,7% 8 (75)HQ Rysslandsfond4 098 189 3961,5% 9 (2)Robur Contura3 929 719 4421,5% 10 (11)AMF Pensions Balansfond3 549 845 6381,3%

18. UK Visit Feb 2006 18 VALSITUATIONEN

19. UK Visit Feb 2006 19 PERFORMANCE

20. UK Visit Feb 2006 20 Performance since 1995

21. UK Visit Feb 2006 21 Asset Allocation

22. UK Visit Feb 2006 22 Dispersion

23. UK Visit Feb 2006 23 ACTIVE RETURN BY INDIVIDUALS