Q & A:s

In 2016, the Pension Group, with representatives of the parliamentary parties behind the Swedish pension system, agreed that the premium pension fund platform should be reformed and transition from application-based to procured, to provide premium pension savers with safer and higher pensions.

The government and the Pension Group decided to establish the Swedish Fund Selection Agency in 2022 to implement the reform of the premium pension system.

The authority's mission and operations are governed by law and are thus decoupled from political control, which means that the government cannot influence which individual funds are included on the fund platform.

The fund platform has previously been application-based. This means that fund managers have applied to the Swedish Pensions Agency to provide a fund on the fund platform. If the fund manager met the requirements, the fund manager and the Swedish Pensions Agency entered into a fund agreement and the fund was made eligible for the fund platform. This meant that at its peak the fund platform contained almost 900 funds. Unfortunately, some of these funds and fund managers did not act in the best interests of savers.

The fund platform is now changing and funds are procured by its special regulations for the procurement of funds for the premium pension fund platform. This means that different categories of funds are procured and that only funds that fulfil the requirements regarding suitability, controllability and sustainability, and that are deemed to have the best combination of high quality at a low fee are allowed to be on the fund platform.

Fund agreements are limited in time, which means that new procurements will be carried out on an ongoing basis to ensure that the funds available on the fund platform at any given time are of high quality and cost-efficient.

The Swedish Fund Selection Agency's task is to procure, monitor, and ensure the quality of the funds available on the premium pension fund platform.

Procurement of funds is carried out to ensure that the funds available on the fund platform are suitable, cost-efficient, controllable, sustainable, and of high quality. At the same time, the Swedish Fund Selection Agency must ensure that the range of funds on the fund platform offers savers freedom of choice by allowing them to choose between funds with different risk profiles and investment objectives.

The Swedish Fund Selection Agency is responsible for the ongoing monitoring of all funds on the fund platform. This means ensuring that fund managers and funds comply with the conditions set out in the fund agreements between the Swedish Fund Selection Agency and fund managers. The aim is to create a safe choice environment for savers where all funds on the fund platform are quality-assured at all times.

The Swedish Fund Selection Agency's operations are financed by tender fees and an annual fee from the procured funds. The Swedish Fund Selection Agency is therefore not funded by taxes.

The Swedish Fund Selection Agency is governed by a board whose members are appointed by the government. The board makes all strategic decisions, for example, it decides which fund categories to procure and which fund managers should be selected in a procurement process.

The office carries out the Agency's operational activities and is responsible for producing decision-making documents on behalf of the board.

This means that the Swedish Fund Selection Agency benefits from the Swedish Pensions Agency's administrative resources and expertise. At the same time, the Swedish Fund Selection Agency is independent of the Swedish Pensions Agency in its decision-making.

At the moment, just under 40 people work at the office of the Swedish Fund Selection Agency. Employees at the office of the Swedish Fund Selection Agency are formally employed by the Swedish Pensions Agency and are part of the Swedish Pensions Agency's organisation.

The Swedish Fund Selection Agency's operations are fully financed by tender and platform fees from fund managers.

Fund managers submitting a tender in a procurement need to pay a tender fee, which is a predetermined amount in SEK.

Fund managers who have funds on the fund platform pay a platform fee calculated in basis points of assets under management on the fund platform. Read more about fees here. External link.

Yes, the fees are continuously reviewed and adjusted as needed, based on cost recovery.

Payment instructions are always included in the tender documents.

Yes. However, the aim is that a dialogue with the market, a thourough evaluation and equal treatment of all tenderers from start to finnish in the process will give transparency and create trust for both the award decision and the Swedish Fund Selection Agency.

The legislation does not entail a shift in the responsibility on the procured fund platform compared to the fund platform today. The saver will still bear the financial risk in the choices made on the fund platform.

On June 20, 2022, the legislation was changed so that no fund agreements for funds on the fund platform could be signed using the previous application procedure for affiliated funds. New fund agreements can only be signed after award during a procurement for funds to the fund platform.

Yes, a draft fund agreement will be made available in connection to each procurement.

No, there will be no requirement in the fund agreement to provide a link to Swesif's sustainability profile. The requirement in the fund agreement will be to provide a link to the statutory RTS templates that applies since 1 January 2023.

From Q1 2023, the Pensions Authority will offer the possibility to link on the fund portal to Swesif's sustainability profile which has updated its template with information from EU regulations regarding SFDR articles 6, 8 and 9 and parts of the taxonomy. It will be voluntary for managers to display their sustainability information to savers via the link to Swesif's sustainability profile.

According to the Social Insurance Code, the premium pension system must offer freedom of choice by enabling the pension saver to influence the level of risk and investment policy for the management of the funds invested on behalf of the saver. The Swedish Fund Selection Agency interprets this as meaning that the fund market, through a wide range of fund categories with different focuses, should allow savers to put together a portfolio with the desired level of risk, and through conscious choices be able to achieve diversification effects. The Swedish Fund Selection Agency ensures this by procuring various fund categories.

In designing the range, the Swedish Fund Selection Agency has to balance freedom of choice with the other statutory requirements of cost-efficiency, suitability, controllability, quality and sustainability. However, it is of great importance to the Board that pension savers feel that the range of funds on the Market is sufficiently comprehensive. The Swedish Pensions Agency continuously monitors savers' perception of the freedom of choice on the fund market.

The basic principle is that the capital in a category is distributed equally between the funds that have been allocated in the procurement of the category. However, there are exceptions to the basic principle, for example, funds that are awarded fund contracts may keep the capital already in the fund even if the capital exceeds what the fund would otherwise have been allocated.

The procured fund platform will, when the entire platform is procured, consist of approximately 45 procured categories.
The existing categories are a good starting point to understand the categories that will be procured for the marketplace, but this does not mean that the future offer is limited to the categories that are currently in the marketplace.

Until the first quarter of 2025, the Swedish Fund Selection Agency has procured the categories:
- Actively managed European equity funds
- Global Index Funds
- European index funds
- Actively managed Nordic equity funds
- Actively managed Nordic small cap funds

Information on ongoing procurements can be found here. External link.

In each tender, there are specific criteria, which we call mandatory requirements and exclusion criteria. These are reviewed before each procurement and are, for example included in the procurement documents, procurement specification and xxclusion criteria and mandatory requirements and become available when the procurement is advertised on the procurement platform e-Avrop.

We may also present a preliminary procurement specification for a future procurement to allow potential tenderers to prepare and submit questions and comments.

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It is possible for the Swedish Fund Selection Agency to procure funds for new categories that are not currently represented on the fund platform. When procuring a completely new category, there is no existing capital to allocate to the funds procured.

Part of the Swedish Fund Selection Agency's assignment is to keep abreast of external factors, new strategies and products and to evaluate the range of funds on the marketplace on an ongoing basis so that it meets savers' needs.

Only UCITS funds, UCITS companies, specialised funds, and foreign equivalents of specialised funds (if they are allowed to be marketed to retail investors in Sweden) may be procured to the fund platform. What is permitted in each fund category is stated in the procurement specification that is made available in connection with the announcement of a new procurement.

Each procurement has specific criteria, which we refer to as mandatory requirements and exclusion criteria. These are reviewed before each procurement and are set out in the procurement documentation. The procurement specification, exclusion criteria and mandatory requirements will be available when the procurement is advertised on e-Avrop.

We may also present a preliminary tender specification for a future tender to allow potential tenderers to prepare and submit questions and comments.

For the time being, the same liquidity requirements will apply to the procured fund platform as to the current affiliated platform, which means that only funds with daily trading will be allowed.

However, the Swedish Fund Selection Agency will continuously evaluate the range of funds on the platform to ensure that it meets savers' wishes and needs. If it is considered appropriate to expand the range with new types of savings products, the Swedish Fund Selection Agency has the mandate to do so.

As the range is designed to offer a variety of funds on the platform as a whole, the fund is locked to the category it was procured for.

If a fund changes in such a way that it does not fulfil the criteria it had at the time of allocation, for example by completely changing its investment focus, the Swedish Fund Selection Agency will investigate it as a possible breach of contract, which may lead to the termination of the fund contract.

Before a procurement, the Swedish Fund Selection Agency conducts a comprehensive analysis to decide on the number of funds to be procured in a category. The analysis includes several factors such as the volume of capital, the capacity of the funds and the number of potential tenderers.

The objective is to procure the number of funds that best fulfils the objectives of being suitable, controllable, cost-efficient, sustainable and of high quality, while offering savers freedom of choice. As a result of this approach, the number of funds will vary between different categories.

As the Swedish Fund Selection Agency only analyses the optimal number of funds per category, there is no target for the total number of funds on the marketplace.

Before the procurement started in 2023, there were around 450 funds on the platform. The number of procured funds will likely be reduced to ensure that the funds are suitable, sustainable, verifiable, cost-effective and of high quality. At the same time, the platform should offer a wide range of fund options with different investment strategies and risk levels, which means that the number of fund categories cannot be too limited.

The Swedish Fund Selection Agency normally signs fund contracts for six years with the possibility of extension up to a maximum of twelve years. This means that a new procurement of a category normally takes place after six years at the earliest. At that time, a new decision is also taken on the number of funds to be procured for the category. The number of funds may increase or decrease, depending, for example, on whether interest in the category has increased or decreased among pension savers.

If a category changes significantly during the contract period, for example, as a result of funds being closed, a new procurement may take place earlier than after six years.

The Swedish Fund Selection Agency will accept tenders in Swedish or English.

No, it will not. The Swedish Fund Selection Agency follows the EU law principle of equal treatment and does not differentiate between tenders for already affiliated funds and tenders for funds that were not previously part of the affiliated fund market. All tenders are assessed on the same basis and all tenderers are treated equally.

The award criteria have two main components, quality and price. The weighting between these two main components varies from one tender to another, but in general, more weight is given to quality than to price.

The tender documentation for each procurement shows how much weight price and quality have in the procurement and how these weights are allocated to different sub-components.

AP7 Såfa and its underlying assets AP7 Aktiefond and AP7 Räntefond are not evaluated by the Swedish Fund Selection Agency and are not subject to any procurement.

The Swedish Fund Selection Agency evaluates all elements that are deemed to affect a fund's ability to achieve good returns over time. This includes the fund and the fund manager's organisation, including, for example, administration and control functions such as risk management and compliance. The tender documents for each tender will specify exactly which elements are assessed and how much weight each element has in the overall evaluation.

Tenderers have approximately 6 weeks from the publication of a tender notice to the deadline for submitting tenders.

Please note that the Swedish Fund Selection Agency normally announces which procurements are planned for the coming calendar year in the autumn of the previous year. In addition, preliminary tender specifications are published a few months before the advertisement. This is done to give tenderers ample time to prepare for the announcement of a procurement and to submit any comments to the Swedish Fund Selection Agency.

Yes, but a tenderer may only submit one tender per fund and must pay the tender fee for each tender. If more than one tender is submitted for the same fund, all tenders for that fund will be disqualified.

All documents received or produced by a public authority are subject to the principle of public access and can be requested.

Before a disclosure can take place, the Swedish Fund Selection Agency carries out a confidentiality assessment of the information in the document and information that is deemed to be covered by, for example, commercial confidentiality is masked before disclosure.

In connection with the award decision, a procurement report is published (Link) containing the names of all tenderers, information on the winning bids and the process followed.

Each tenderer also receives individual feedback with information on how their tender ranked against other tenders based on the various evaluation criteria.

The Swedish Fund Selection Agency evaluates all qualified tenders. The score given for the evaluation criterion price is based on the price indicated by the tenderer in the tender. The tenders with the highest overall score in the evaluation proceed to the interview phase, where the Swedish Fund Selection Agency conducts site visits. The fund managers interviewed are then allowed to submit a revised price.

A fund manager that has not proceeded to the interview phase has no possibility to change the price submitted in the tender documents.

After the Swedish Fund Selection Agency publishes an award decision, there is a 10-day standstill period before the decision becomes final.

Fund managers who have participated in a procurement and have not been awarded a contract and who believe that the decision was made on incorrect grounds for some reason have the opportunity to apply for a review of the decision to the Administrative Court during the contractual blocking period.

The procured funds will be reviewed on an ongoing basis based on the terms of the fund agreements. If a fund no longer fulfils the mandatory requirements and allocation criteria specified in the fund agreements, this may lead to breach of contract and termination of the fund agreement.

The Swedish Fund Selection Agency's activities and the laws that regulate the agency and the procurement of funds for the premium pension fund market are designed to ensure the quality of the funds, based on the goal of offering safer and higher pensions for savers. A prerequisite for this is not only to purchase the most suitable, high-quality funds, but also to exclude fraudulent players from the fund market to safeguard savers' interests. The Swedish Fund Selection Agency has therefore implemented a procurement process with extensive evaluation of the fund, the fund manager and the management organisation.

The ongoing review is an important part of maintaining the quality of the procured funds during the contract period. The fund manager must provide the Swedish Fund Selection Agency with information on an ongoing basis, as specified in the fund contract for each procurement. The collection of information will be done via questionnaires sent out and also, if necessary, at the request of the Swedish Fund Selection Agency.

Yes, templates are being developed for both Swedish and English.

The procured funds will be reviewed on an ongoing basis based on the mandatory requirements and award criteria specified in the fund agreement for each procurement. If a fund no longer complies with the fund contract during the contract period, this may lead to breach of contract and termination. A fund that continuously maintains the strategies, processes, resources, etc. that it had at the time of award and complies with the terms of the fund contract is deemed to be of equivalent quality to that which it had at the time of procurement.

Fund agreements must, by law, contain conditions requiring fund managers to manage the fund assets in an exemplary manner in terms of sustainability. A minimum requirement is that the fund manager, in its management, must comply with what follows from such international agreements that Sweden has entered into on issues relating to sustainability. The exact sustainability requirements are specified by the Swedish Fund Selection Agency in each procurement.

International agreements of particular relevance in this context are the UN Conventions on the use of controversial weapons, the UN Global Compact, the UN Guiding Principles on Business and Human Rights (UNGP), the Paris Agreement and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct.

These agreements all guide how companies and financial market participants should act for their activities to be considered sustainable. These include requirements to respect human and labour rights, to protect the environment and climate, and to protect consumer interests, as well as to combat all forms of corruption.

Together, these initiatives and conventions therefore form the basis for the sustainability requirements that the Swedish Fund Selection Agency places on the funds that are procured.

We impose mandatory sustainability requirements on both the fund's investments and the fund manager.

The fund manager must be a signatory to and comply with the UN Principles for Responsible Investment (PRI), must not be domiciled in a country on the EU's list of non-cooperative jurisdictions, must not be subject to EU or UN sanctions, and must comply with the EU Principles of Shareholder Engagement.

In our procurement of funds, we look at whether the manager does not invest in certain types of activities, how well sustainability aspects are integrated into the fund manager's investment processes, how responsible ownership is practised and what resources the manager has dedicated to its sustainability work.

A high-quality equity fund in terms of sustainability is characterised by that the fund manager:
- identifies and assesses whether the activities the fund invests in
- are associated with violations of any of the ten principles of the Global Compact, the UN Guiding Principles on Business and Human Rights (UNGPs) or the OECD Guidelines for Multinational Enterprises
- take action in line with the objectives of the Paris Agreement
- integrates these principles into its investment process
- act as an investor in case of identified violations

Do not invest in activities that:

are associated with serious violations of the Global Compact, the UNGPs or the OECD Guidelines for Multinational Enterprises, but have not taken adequate measures to prevent future serious violations and/or have not compensated third parties who have suffered serious harm from verifiable violations
- that produce, stockpile, trade or use controversial weapons (anti-personnel landmines, cluster munitions, biological and chemical weapons and nuclear weapons)
- where the production of tobacco and tobacco products represents more than 5% of turnover
- where the extraction or production of thermal coal or oil sands accounts for more than 5% of turnover
- where the generation of electricity by burning thermal coal accounts for more than 5% of turnover
- which are subject to EU or UN sanctions in force

No, the Swedish Fund Selection Agency has no general requirement for SFDR reporting. The requirement for each procurement is determined and stated in the procurement specification.

The Swedish Fund Selection Agency uses the SFDR reporting requirements to define the type of fund to which a procurement relates. There is no explicit minimum percentage of sustainable investments. However, for each procurement, the Swedish Fund Selection Agency defines mandatory sustainability requirements and screening criteria relating to the manager, the investment process and active ownership. It is against these requirements and criteria that the funds are evaluated during the procurement phase and the contract period.

The requirements mean, among other things, that analyses of sustainability risks and opportunities, as well as breaches of international conventions, must be integrated into both the fund's investment process and active ownership. And this applies to all holdings in the fund, not just the proportion described as sustainable investments in the SFDR reporting.

Fees will be kept under review and adjusted if necessary, based on cost coverage.

Both approaches are possible. This will be clearly stated in the procurement documents. The funds on the premium pension fund platform should be cost-efficient, offering funds of high quality to as low fees as possible.

The Agency’s activities will be financed through tender fees and an annual fee from the procured funds covering the costs of the activities conducted in accordance with law. The Swedish Fund Selection Agency is not financed by grants from tax funds. The organization is to be financed outside the state budget. Read more about the fees here.

The current discount model for funds on the fund platform today will be phased out and replaced by a fee model based on procurement.

Payment instructions will be included in the tender documents .

Yes, the transition is mandatory because all funds on the platform will be procured.

When a tender for a fund category is announced, the current fund agreement is cancelled for all funds in the category. However, the funds will remain on the market until the procurement is finalised, as the funds awarded fund contracts will replace the affiliated funds whose contracts have been terminated.

The Swedish Fund Selection Agency will sign new fund contracts with the fund managers that scored highest in the weighted assessment of the evaluation criteria and fulfilled the mandatory requirements.

There is no deadline, but the ambition is to complete the procurement as quickly as possible with high quality.
By the end of 2025, the Swedish Fund Selection Agency expects that more than half of the capital on the fund platform will be procured or under procurement.

The Swedish Fund Selection Agency may decide not to procure a category if, for example, it is not considered suitable for premium pensions due to changes in the market. For example, the Russian fund category was discontinued in connection with the invasion of Ukraine in 2021, and there are currently no plans to procure such a category. It may also be the case that the Swedish Fund Selection Agency judges that it is not possible to find funds of sufficiently high quality within a certain category and that it is therefore not procured.

The Swedish Fund Selection Agency is aware of the risk that large transactions in less liquid assets may cause market movements and takes this into account. When a fund is phased out from the fund platform, this is handled by the Swedish Pensions Agency. The Swedish Fund Selection Agency maintains a close dialogue with fund managers on these issues, and the guiding principle for both authorities is to act in the best interests of pension savers.

Fund managers whose funds are to be implemented or phased out from the fund platform are contacted by the Swedish Pensions Agency and will have a dialogue with them before implementation.