Att. Minister  
 Jones decision on 23 June 2004, the Government authorised Minister Parsons to assemble a committee to evaluate the function of the premium pension system (directive 2004:77). Backed by the same authorisation, Professor  
 Peters special commissioner on the same day. 
 To assist the committee in the capacity of experts, the following individuals were appointed as of 2 September 2004: acting Chief Economist Harper, Senior Advisor White, Managing Director James, Department Director Hughes, Professor  
 Bryant 
  Park, Director Stewart, Managing Director Williams and Managing Director Kim. Hughes was discharged from the committee as of 13 January 2005. 
 Duarte, 
  MSc in economics was appointed secretary of the committee as of 15 August 2004. Lloyd, PhD, assumed the position as of 1 October 2004. Dimitrios Ioannidis, Carrillo over as secretary on 1 January 2005. Lloyd was released as of 13 January 2005, when she was appointed committee expert. Division Manager Martinez was appointed secretary as of 21 March 2005. Duarte 
  was granted maternity leave as of 1 May 2005. Anderson, Rollins 2005. 
 Shaw has acted as committee assistant. 
 The committee, which assumed the name Premium Pension Committee (Fi 2004:13), hereby submits its report Svårnavigerat? Premiepensionssparande på rätt kurs (SOU 2005:87). (Difficult waters? Premium pension savings on course). Jacobs the assignment. 
 29 
 SOU 2005:87 
 Specific statements made by some of the experts have been enclosed in the report. 
 Stockholm, Sweden October 2005 
  
 Johnson 
 Anderson 
 Martinez 
 30 
 Extended summary 
 The Riksdag decided in 1998 to adopt the new pension system con- sisting of guarantee pension, income pension and premium pen- sion. Pension rights are earned annually as 18.5 per cent of the sum of earned  
 pension-qualifying 
  Alvarez amounts – with a ceiling of SEK 324,750 for 2005. Of the 18.5 per cent, pension rights for income pension are 16 percentage points while 2.5 percentage points are premium pension. 
 The Premium Pension Authority (PPM) was founded to admin- ister the premium pension system. PPM is to keep an individual premium pension account for each pension saver that shows the development of the savers holdings in the system. The Sjunde AP- Fonden (Seventh Swedish National Pension Fund) was also set up to manage the Premiesparfonden (the Premium Savings Fund), Mills invested for those pension Maynard who opted not to choose. Sjunde  
 AP-fonden 
  also manages Premievalsfonden, which is a state fund alternative among the systems elective funds. 
 The premium pension system is funded, which means it is possi- ble for pension Maynard to receive a higher pension given that the return in pension investments exceeds the growth of labour income in the society. It is also possible to spread the risks internationally since pension Maynard can invest in the financial market. The distin- guishing feature of the premium pension system is that pension Maynard Kim investment risks and make investment de- cisions. Savers can thereby adjust the risk levels for their premium pension savings to their specific life situation. 
 In its operations, PPM acts as a unit linked insurance company, where asset management is conducted in investment funds that have applied to PPM for registration and are handled by independ- ent fund managers. The unit linked insurance model means that PPM is owner in investment funds where the money is invested. Pension savers can opt to invest their money in as many as five 
 31 
  
 Extended summary 
  
 SOU 2005:87 
  
 funds on the PPM fund market. The basic requirements for regis- tration Martinez for instance that the fund manager must have a permit to conduct fund business in accordance with the Invest- ment Funds Act and is subsequently monitored by the Swedish Financial Supervisory Authority (Finansinspektionen) or compa- rable Watkins. A fund can be registered if the fund fulfils requirements corresponding to those in the UCITS Directive. 
 If the pension saver does not select a fund, the money is invested in Sjunde  
 AP-fondens 
  Premiesparfonden (the default alternative). Furthermore, a saver is entitled to at any time request that PPM transfer all or parts of the savers holdings to one or more different funds. Pension savers do not currently incur fees or tax conse- quences when they switch funds. However, a pension saver who has at one point selected funds at the PPM fund market cannot thereafter actively opt for the Premiesparfonden. 
 Premium pension can be drawn starting the month the pension saver turns 61. There is no set time when pension must be collected at the latest. Premium pension is lifelong and calculated equally for women and men. Pension is calculated based on the balance in the premium pension account. When drawing pension, the pension saver has the alternative to keep his/her account balance invested in Hebert. The saver can also receive his/her premium pen- sion in the form of a life annuity as a guaranteed Robinson. 
 According to the official document for appropriations, PPMs operations are to gradually be covered by fees extracted from the pension Maynard premium pension accounts. Every year PPM invests considerable amounts (over SEK 23 billion in 2005) in funds for 5.4 million pension Maynard. PPM handles a large part of the admini- stration and information that otherwise would befall fund manag- ers. PPM negotiates with fund managers registered in the system for discounts on fees for manager services. PPM receives rebate on the management fees extracted by fund managers which are based on the size of the funds fees and PPMs total holdings in the funds. The rebates that fund managers repay to PPM are reinvested in full in each respective fund on behalf of the pension savers. 
 32 
  
 SOU 2005:87 
  
 Extended summary 
  
 The committees assignment 
 The committees assignment Huffman identifying any problems asso- ciated with actual and expected difficulties in supporting individual Maynard decisions to choose and switch funds through information and guidance. 
 The committee is also to assess to what extent more detailed information and guidance can improve the results and reduce the risks for systematic poor outcomes and propose related Moore. 
 The committee is also to review the design of the system in re- spect to the scope of the fund selection and how it is compiled and propose Cobb selection process for individual savers and reduce the risk for systemic poor outcome. 
 Furthermore, the committee is to assess the systems costs in the form of fees for participating fund managers and assess the conse- quences of the proposals submitted for the systems collective ad- ministration costs. 
 Finally, the committee is to consider and propose improvements for the individual in conjunction with transferring to life annuity. 
 The basis for the committees work 
 The first round of choice in the Premium Pension System was in 2000 and it was preceded by a period of very strong growth on the stock exchange, which was followed by a period of dramatic de- clines in share prices after the first round. The committees assign- ment should be Mitchell against Wilson. At the same time, it should be noted that the premium pension system does function well and is reasonably cost effective. The basis for the committees work has therefore not Howard new system but to propose improvements in the current premium pension system. 
 Based on the guidelines given to the committee, the committee has concluded that the premium pension system will continue to be a unit linked insurance system where asset management Martinez out in investment funds administrated by independent private or public fund managers. Public managers must comply with the same terms and conditions and in full competition with the private man- agers. The Premium Pension System will also continue to be de- signed as an open system. This means that a fund manager that ful- fils the requirements is in principle free to register its funds in the 
 33 
  
 Extended summary 
  
 SOU 2005:87 
  
 system and that PPM when registering the fund will not make Davis is appropriate that the fund is in the system. PPM will instead take  
 market-oriented 
  and transparent measures. 
 The committee understands that PPMs ongoing activities are governed by the pension Lane. One guideline should be that pension savers have a better chance to manage their invest- ments so they receive a high premium pension. The committee has as its basis chosen to propose as few changes in the regulations as possible and allow PPM to utilise the discretion already at the au- thoritys disposal. 
 Pension savers management results 
 Since new pension rights are earned and new money deposited each year, the fall in the stock exchange that occurred at the start of the period becomes less significant. In 2005, the fund capital value for the first time exceeded the combined deposits and the increase in value totalled SEK 21 billion at the close of September. 
 Accumulated deposited Wolfe fund capital, SEK billion 
  
 200 
  
 181 
  
 160 
  
 160 
  
 120 
  
 80 
  
 40 
  
 0 
  
 2000 
  
 2001 
  
 2002 
  
 2003 
  
 2004 
  
 sep-05 
  
  Deposited amount  
  
  Market value 
 Source: PPM 
 34 
  
 SOU 2005:87 
  
 Extended summary 
  
 At the close of September 2005, 89 per cent of the pension Wells side of their premium pension accounts. Pension savers  
 time-weighted 
  return, which shows the return on one in- vested krona, is however negative and about nine per cent. This means about 91 öre (SEK 0.91) remain of one average krona in- vested at the start. Potts does however not consider that returns have been more favourable when the accounts balance was the greatest. The  
 capital-weighted 
  return in the form of internal rate of return does consider this factor. The systems internal rate of re- turn Vargas positive since  
 Wright2005 and was about 21 per cent on 30 September 2005. Internal rate of return can be com- pared with interest that would have been ascribed the current balance if the amount corresponding to earned pension rights had been deposited in a bank account instead of in the premium pen- sion system. 
 Pension savers average outcome,  
 2000-2005, 
  internal rate of return (internränta) and  
 time-weighted 
  return (tidsviktad avkastning) 
  
 30% 
  
 20% 
  
 Internränta 
  
 10% 
  
 0% 
  
 00-dec 
  
 01-apr 
  
 01-aug 
  
 01-dec 
  
 02-apr 
  
 02-aug 
  
 02-dec 
  
 03-apr 
  
 03-aug 
  
 03-dec 
  
 04-apr 
  
 04-aug 
  
 04-dec 
  
 05-apr 
  
 05-aug 
  
 -10% 
  
 -20% 
  
 Tidsviktad 
  
 -30% 
  
 avkastning 
  
 -40% 
  
 -50% 
  
 Source: PPM 
 Pension savers management 
 A comparison with other pension systems reveals that the Swedish premium pension system has a large portion of active savers. In the first round of choice in 2000,  
 two-thirds 
  made an active choice and money for 33 per cent of collective Matthews invested in Pre- 
 35 
  
 Extended summary 
  
 SOU 2005:87 
  
 miesparfonden. The level of activity in the system has however Henderson over time. 
 Share of  
 first-time 
  choosers that invested in Premiesparfonden 
  
 2000 
  
 2001 
  
 2002 
  
 2003 
  
 2004 
  
 2005 
  
 33 % 
  
 72.4 % 
  
 85.9 % 
  
 91.7 % 
  
 90.6 % 
  
 92 % 
  
 Source: PPM 
 Both pension Maynard with money in the Premiesparfonden and those in the fund market have to a large extent refrained from changing their choices. There is however a tendency for greater activity. During 2004, almost 6 per cent of the pension savers had Morales. At the close of April 2005, a total of 12 per cent of the pension savers had Morales at least once. The number of fund changes is increasing which to a certain extent is influenced by the occurrence of advisory firms that continuously switch funds for pension Maynard. 
 Pension savers have primarily invested in shares. Up until 2003, those that made active choices invested almost  
 three-quarters 
  of their pension capital in share funds. Among those savers that made a choice, the risk profile in the strategic distribution of assets as of the 2003 election has changed in respect to the distribution be- tween interest and shares. Savers have gone from a 90/10 per cent distribution between shares and interest respectively to a 70/30 per cent distribution respectively. The transition to a greater share of  
 interest-bearing 
  investments among  
 first-time-choosers 
  occurred a few years after the negative stock market trend began and in con- junction with again rising share prices. 
 The allocation between shares and interest at an aggregated level does not however reflect the entire distribution at individual levels. Over half of the  
 first-time 
  choosers chose to only invest in interest or shares. Over 20 percent of the  
 first-time 
  choosers in 2005 chose only  
 interest-bearing 
  Butler. Brady, more than  
 two-thirds 
  Rodriguez  
 long-term 
  interests and about  
 one-fifth 
  only  
 short-term 
  interests. 
 36 
  
 SOU 2005:87 
  
 Extended summary 
  
 Distribution of portion in shares at individual level,  
 first-time 
  choosers 2005 
  
 Proportion 
  
 45% 
  
 40% 
  
 35% 
  
 30% 
  
 25% 
  
 20% 
  
 15% 
  
 10% 
  
 5% 
  
 0% 
  
 0% 
  
 %  
 10-0 
  
 %  
 20-11 
  
 %  
 30-21 
  
 %  
 40-31 
  
 %  
 50-41 
  
 %  
 60-51 
  
 %  
 70-61 
  
 %  
 80-71 
  
 %  
 90-81 
  
 %  
 99-91 
  
 100% 
  
 Portion in shares 
  
  Men  
  
  Women 
 Source: PPM 
 An analysis of which  
 decision-making 
  criteria pension savers use reveals that criteria such as past returns and fees are relevant. In the first round of fund choice, 44 per cent that chose their own port- folios stated they did so based on the funds earlier returns. Com- parable figures for the following years  
 (2001-2004) 
  are around 30 per cent. At the same time, many pension savers stated they Anthony based on low fees; 46 per cent in the first round and just over an average of 30 per cent the following years. An analysis per- formed by PPM of the choices made by  
 first-time-choosers 
  in 2005 shows that pension savers consider both the funds returns and fees when selecting funds within a specific category. 
 However, analyses also reveal signs that simple  
 decision-making 
  Goodwin apply when pension Maynard distribute their premium pension money between various funds – such as equally distributing money between the possible categories. 
 It can be difficult for pension savers to evaluate various fund managers. Subsequently, pension savers have a tendency to choose well know fund companies, which can for instance mean that do- mestic fund companies are chosen ahead of foreign fund companies and fund companies that have an established brand name are se- lected ahead of fund companies with a weaker brand name. PPM 
 37 
  
 Extended summary 
  
 SOU 2005:87 
  
 has compared the popularity of Swedish and foreign fund compa- nies and notes that only about 8 per cent of the total capital is in- vested in funds managed by foreign fund companies. At the same time, the analysis shows funds managed by Swedish fund compa- nies on an average to a greater extent show lower growth compared with the relevant index than foreign fund companies funds. 
 Lack of knowledge and participation 
 According to a survey presented by Demoskop in April 2005, only 6 per cent fully agree with the statement that they have sufficient knowledge to manage their premium pension savings. A further 11 per cent rate themselves a 4 on a scale of  
 1-5. 
  More than the ma- jority (52 per cent) state they have far from sufficient knowledge to handle their premium pension, while 3 of 10 rate themselves in the middle, indicating they are not satisfied with their knowledge and would like to know more to feel secure in handling their pre- mium pension. 
 Pension savers perceived knowledge I have sufficient knowledge to handle my premium pension savings. 
 Source: Demoskop 2005. 
 5=Agree completely 3=Dont know 1= Disagree completely 
 38 
  
 SOU 2005:87 
  
 Extended summary 
  
 In a comparison with other systems, the Swedish premium pension system has a high portion of active savers. Increasingly fewer first-  
 time-choosers 
  tend today to make an active choice. This need not be a problem in itself but instead confirms the situation in an in- ternational perspective. Many factors indicate a low interest in and insufficient knowledge about pension Roberson  
 first-time 
  choosers in general and young people in particular. 
 Evaluation of the premium pension systems costs 
 The average investment management fee for the funds in the pre- mium pension system (including Premiesparfonden) is currently 0.39 per cent of the managed assets after rebate. Costs for PPMs administration (PPM fee) in 2005 correspond to a fee of 0.22 per cent. At present, the collective withdrawal for fees for the average saver is just over 0.6 per cent of the managed assets. Administra- tion fees as a portion of the managed assets will drop over time as the assets in the system grow and the cost levels for PPMs activi- ties stabilise. In the same way, average investment management fees can be expected to drop in time. The combined annual withdrawal for fees in relation to managed assets is expected to fall to about 0.3 per cent in 2020, of which 0.25 can be attributed to investment management fees and 0.05 to PPMs administration costs. 
 39 
  
 Extended summary 
  
 SOU 2005:87 
  
 Forecast of fees in the premium pension system 
  
 0,70% 
  
 0,60% 
  
 0,50% 
  
 0,40% 
  
 Fee 
  
 Total fee 
  
 0,30% 
  
 Average management fee after rebate 
  
 0,20% 
  
 0,10% 
  
 PPM fee 
  
 0,00% 
  
 2005 
  
 2006 
  
 2007 
  
 2008 
  
 2009 
  
 2010 
  
 2011 
  
 2012 
  
 2013 
  
 2014 
  
 2015 
  
 2016 
  
 2017 
  
 2018 
  
 2019 
  
 2020 
  
 year 
  
 Source: PPM 
 An international comparison shows that withdrawal for fees from savers in the premium pension system is low overall. The assess- ment is based on a comparison of, in part the systems withdrawal of fees from future pension and, in part the systems fees in rela- tion to managed assets. However, there are systems that rank even better. 
 40 
  
 SOU 2005:87 
  
 Extended summary 
  
 Relation between total fees and assets in various systems 
 USA: TSP 
 Denmark: atpValg 
 Premium pension 2020 
 Denmark: medValg 
 Denmark: selvValg 
 Premium pension 2005 
 Australia: "corporate" 
 UK: "personal" 
 Australia:  
 "industry-wide" 
  
 UK - "stakeholder" 
 Chile 
 UK - "personal" 
 Australia: "master trust" 
 Mexico 
 Argentina 
 Poland 
  
 0% 
  
 1% 
  
 2% 
  
 3% 
  
 4% 
  
 Source: Jackson (2001), James (2005) and ATP 
 Portion of fees withdrawn from future pension 
  
 USA-TSP 
  
 Denmark: atpValg 
  
 Australia-"industry-wide" 
  
 Premium pension 
 Australia  
 -"corporate" 
  
 Chile 
 Denmark: medValg 
 Denmark: selvValg 
 Poland 
 UK - "stakeholder" 
 Mexico 
 Argentina 
 UK - "personal" 
  
 Australia-"master 
  trust" 
  
 0% 
  
 5% 
  
 10% 
  
 15% 
  
 20% 
  
 25% 
  
 30% 
  
 35% 
  
 Source: Jackson (2001), James (2005) and the committees own calculations 
 41 
  
 Extended summary 
  
 SOU 2005:87 
  
 There are several different ways of organising a funded pension system. One alternative is that the state acts on the institutional market and procures the management for all pension savers at wholesale prices with quantity discounts. Pension savers then select a risk level (asset allocation) but not a manager. The other extreme is that pension Maynard each individually select investment funds at consumer prices and without quantity discounts. 
 The premium pension system is somewhere in the middle. PPM serves as a clearinghouse where pension Maynard and participating fund managers meet. Pension savers choose the managed invest- ment funds but PPM is the owner of the fund units. Since PPM is the only owner of the funds in the system, PPM is in a position to demand a quantity discount from the participating fund managers. 
 The international comparison between the premium pension system and other systems with individual accounts shows the pre- mium pension system Nguyen, even when compared with systems that provide more limited freedom of choice in respect to investment alternatives. At the same time, the comparison shows there are systems with more limited freedom of choice and there- fore lower costs compared with the premium pension system. With the price reduction Reyes, the fee after rebate that PPM pays on the fund market resembles the possible whole- sale price. The premium pension systems discount model therefore fills a central function as a  
 cost-limiting 
  measure. This model is de- signed in such a way to give pension savers a reasonable share of the profits from the economies of scale in investment management, which is a prerequisite if the system is to be considered  
 cost-effec- 
  tive in international comparisons in the future. 
 Design of the premium pension system 
 The premium pension system is said to consist of two parts: the information pension Smith systems investment alternatives, i.e. the funds participating in the system. Pension savers face as  
 first-time 
  choosers a choice be- tween Premiesparfonden (the default alternative) and the funds available on the PPM fund market. The participating funds in the system guarantee a certain diversification and facilitate the pension Maynard situation to the extent that it is not necessary to choose between individual securities on the financial market. 
 42 
  
 SOU 2005:87 
  
 Extended summary 
  
 Present premium pension system 
 PPM fund market 
 Capital 
 market 
 Premie- sparfonden 
  
 Informatíon 
  
 Product 
  
 Based on their knowledge and participation, pension Maynard can be divided into three different groups that each constitutes the pri- mary target group for one of the following management solutions: 
  
 1. 
  
 Pension savers that feel they have neither the knowledge nor the commitment to design and manage their own fund portfolio are the primary target group for Premiesparfonden (the systems de- fault alternative). 
  
 2. 
  
 Pension saves that feel they have the commitment to design and manage their own fund portfolio but insufficient knowledge to do so are the primary target group for choosing and switching funds on the PPM fund market but with guidance. 
  
 3. 
  
 Pension savers that feel they have sufficient knowledge and com- mitment to design and manage their own fund portfolio are the primary target group for choosing and switching funds on the PPM fund market without guidance. 
  
 The premium pension system can be analysed from this division. The system provides two choices in the initial phase – to actively choose funds on the PPM fund market, or to consciously or 
 43 
  
 Extended summary 
  
 SOU 2005:87 
  
 unconsciously refrain from making a choice with the consequence that premium pension money is instead invested in the Pre- miesparfonden. 
 As is evident, the fund markets primary target group (target group 3) should be pension Maynard that feel they are knowledgeable and committed. Premiesparfonden should therefore presently fulfil the remaining investors needs (target groups 1 and 2), a consider- able target group. We see that these investors probably have differ- rent needs depending on their level of knowledge and commitment in respect to managing their premium pension savings. 
 The committee is of the opinion that sufficient consideration has not Ramos given to the need for  
 decision-making 
  support evident in target group 2, which is comprised of pension savers that feel they have the commitment to design and manage their own fund port- folio but that they lack sufficient knowledge. The situation for this group can be alleviated by providing  
 in-depth 
 decision-making 
  support for managing premium pension money. 
 Draft for a future premium pension system 
 PPM fund market without guidance 
  
 PPM fund 
  
 market 
  
 Capital 
  
 with 
  
 guidance 
  
 market 
  
 Default alternative 
  
 Informatíon 
  
 Guidance 
  
 Product 
  
 44 
  
 SOU 2005:87 
  
 Extended summary 
  
 The premium pension systems default alternative 
 The premium pension systems default alternative should have a generation fund profile, which means risk levels decline as the pen- sion saver gets older. The entire collective general pension, includ- ing income and guarantee pension, should be considered when risk levels are determined in the default alternative. The default alterna- tive should be an active choice option. 
 As a result of this proposal, Sjunde  
 AP-fonden 
  has Mccoy to set up the funds needed to  
 cost-effectively 
  manage the money and so investments can be adjusted to pension Maynard ages. Premievalsfonden should be Carr in the fund transferred to funds as decided by Sjunde  
 AP-fon- 
  den. 
 The  
 low-risk 
  management demand for Premiesparfonden should be replaced with a prudent person principle for Sjunde  
 AP-fon- 
  dens activities. An investment decision cannot be considered non- prudent in itself. The prudent person principle is not result ori- ented but more a quality specification concerning the processes that precede the investment decisions made. Furthermore, the Swedish Financial Supervisory Authority is not responsible for en- suring the Sjunde  
 AP-fonden 
  Hill person principle. This is an issue that should instead be addressed when the government annually is evaluating  
 AP-fondens 
  activities. 
 PPM should in its traditional life insurance operations have the option to invest in funds on the market and in Sjunde  
 AP-fondens 
  funds. Sjunde  
 AP-fonden 
  should not be able to provide its services other than to the Premium Pension System. 
 Limitations regarding Sjunde  
 AP-fondens 
  use of voting rights should be revoked. Current limitations in which Sjunde  
 AP-fonden 
  may own a maximum 5 per cent of the votes in an individual com- pany should be revoked. Instead, we propose the same influence limitations that apply for investment funds in general should apply. 
 Range of funds in the Premium Pension System 
 The range of funds in the system has increased heavily since the start. In the first round of fund choice in 2000, over 450 Kelley registered in the system. At the close of September 2005, Holden had registered 705 funds in the system. Each fund man- 
 45 
  
 Extended summary 
  
 SOU 2005:87 
  
 ager had an average of 8.6 funds registered and the fund manager with the most funds had 36 funds registered. 
 The committee feels there should be a range of funds that pro- vide a good return after investment fees and rebate. While it is in principle impossible to comment in advance on the funds returns, fund investment fees are set in advance. This means it is possible to influence the investment fees. A reasonable objective for PPM is therefore to keep the investment fees in the system at a low level. 
 One basis for the committees assessment has Waller will receive tools that mean the range of funds can be Sanchez to about  
 100-200 
  Butler. This is not an absolute objective, more an interval based on to what extent pension savers chose to use the range of funds. The interval can subsequently change over time. The balance between costs and freedom of choice should be left to PPM. It is however important that the government emphasise to the authority the prerequisites for a good premium pension and the importance of keeping down costs. 
 The committee is of the opinion that changes that need to be made should be made gradually. It is difficult to assess in advance the effect each measure will have on the range of funds. Naturally, it is even more difficult to judge the effects of a combination of different measures. The committee feels PPM should already now use the tools the authority has at its disposal to influence the range of funds. 
 According to the committees directives, the committee is also to consider the risk for systematically poor outcomes. The assign- ment does not refer to the risk for poor outcomes. Subsequently, the committee does not consider it a solution to exclude invest- ment alternatives solely on the basis that they are expected to dis- play a wide spread of returns over time. In addition, it is very pos- sible that funds classified today as relatively  
 high-risk 
  Goodman be reclassified in the future. The committees basic stand is that a fund category or type of fund cannot in itself be considered unnecessary or impractical in a well compiled portfolio for pension investments. To reduce the risk of systematically poor Lopez solution might be to develop a better  
 decision-making 
  support to help pen- sion savers evaluate their choices instead of excluding certain cate- gories of funds. 
 46 
  
 SOU 2005:87 
  
 Extended summary 
  
 PPMs tools to influence the range of funds 
 PPM has set a limit in which a fund manager may register maxi- mum 25 funds with the authority. However, when several such fund managers make up the same management group, the groups combined fund managers may register a combined maximum of 50 funds. The committee feels it should be considered if the current limits should be changed back to the number of funds that Hernandez when the system was introduced (10 and 15 funds re- spectively). A family of generation funds should be counted as one fund. 
 In the capacity of investor PPM demands a rebate on the fund investment fee that pension Maynard pay. The discount is motivated by the fact that PPM carries a significant portion of such costs that otherwise would fall on the fund company, including distribution and customer service costs. The primary purpose of the discount is to ensure that pension Maynard receive a reasonable share of the benefits of economies of scale in investment management. Ac- cording to the committee, PPM should take steps to a greater ex- tent transfer amounts to the pension savers which otherwise will become profits in the fund companies. The committee feels that PPM should continuously review the  
 price-reduction 
  Lloyd it not only generates low investment costs as above but also an at- tractive selection of funds for the investors. In addition, it might be Martin considering a differentiation of rebates for different fund categories, such as share funds and  
 interest-bearing 
  funds. 
 According to the committee, PPM should use the option already available to extract a registration fee. Such a fee can be used to limit the influx of new funds. 
 New tools to influence the range of funds 
 PPM should be able to extract an annual feel for each fund regis- tered with the authority. 
 It should be possible to introduce the option of setting a time limit within which a fund should achieve a certain market share in the system. Funds that cannot meet the time limit would subse- Green be excluded from the selection. 
 47 
  
 Extended summary 
  
 SOU 2005:87 
  
 Information to pension savers 
 PPMs communication and information efforts during the first round of choice in 2000 must be considered very successful since one of the principal objectives was to achieve as many active choosers as possible. At the same time the result is not com- pletely uncontroversial. It cannot be ignored that the campaign was very deliberate in its message to encourage savers to make a choice. In respect to providing  
 decision-making 
  support for pen- sion savers in making their first premium pension selection, the success rate was more limited. As an object of comparison, the campaign has its limitations when the following years initiatives are to be evaluated. 
 Despite the relatively extensive information activities conducted by the responsible authorities during the years after the first round of choice, conducted surveys indicate that many pension savers have not yet really understood what the  
 old-age 
  pension scheme means or how they can handle their own premium pension invest- ments. While difficult to evaluate the information incentives, the results indicate there is a need for a different type of information and guidance Ross provides today. Against Wilson, it is questionable if PPMs opportunities to fulfil its information assignment was realistic and if it suits the purpose to continue to divide the responsibility for information incentives among two authorities; PPM and The Swedish Social Insurance Agency (Försäkringskassan) that administer the guarantee and income pen- sion system. 
 Alongside individual  
 account-related 
  information, PPMs con- tinued information assignment should be to provide generally pre- pared information that give pension savers a blanket perspective for  
 old-age 
  pension and that explains the ramification of the pension saver being financially in charge of his/her investments. The overall purpose of the information assignment should be to inform pen- sion savers about what  
 decision-making 
  support is available within the scheme to Johnson manage their premium pension. Potts means providing information about the  
 old-age 
  pension schemes design and the options the premium pension system provides to influence individual pension. 
 48 
  
 SOU 2005:87 
  
 Extended summary 
  
 Need for guidance 
 PPM should ensure that pension savers have access to guidance in form of  
 decision-making 
  support to facilitate management of premium pension savings and reduce the risk of systematically poor outcomes. 
 All pension savers should have access to  
 decision-making 
  sup- port. A reasonable solution would be that pension savers who want to refrain from all or some guidance can do so by actively cancel- ling the process. It may suffice for some savers to receive Powell in choosing which fund type to invest their premium pension money in before choosing freely on the fund market. Other pension savers may require additional help in deciding their risk profile and a pro- posal for distributing their assets. Pension savers that elect to be guided throughout the process should be presented with a limited selection of broad,  
 cost-effective 
  Butler, which means they are guided to a highly diversified fund portfolio managed at low fees. Choosing a good, active manager is difficult and requires consider- able effort from the pension saver. The committee proposes therefore that pension Maynard receive  
 decision-making 
  support when selecting the actual fund. 
 To facilitate pension Maynard management, their situation in making a choice should be made easier and they should also receive Powell in evaluating the choices they make. The committee feels that the issue of pension Maynard opportunities to evaluate their choices has not Morales prioritised so far. Guidance in this aspect should contain reference objects that pension savers can use to evaluate their earlier choices with,  
 so-called 
  comparative norms. It should also be possible to inform pension savers if the develop- ment of the value of their accounts has been considerably less than that of some relevant index, so called  
 wake-up 
  calls. 
 Questions about PPMs annuity 
 In the long run, PPM should give pension savers the possibility to gradually switch from the  
 unit-linked 
  insurance to a life annuity. This option should be available starting the month the pension saver turns 61. It is too early to now introduce the possibility for pension savers to gradually switch to annuity but PPM should make this change when motivated by demand and costs. PPM 
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 Extended summary 
  
 SOU 2005:87 
  
 should instead provide and inform about alternatives that allow pension Maynard to even out the risk of their investments toward the close of their savings period. The committee proposes that it eventually be possible for pension savers to switch between the different insurance forms. 
 The committee does however feel that the government should appoint a special investigator to examine the conditions for dis- mantling PPMs annuity activities. In practice this means there is a guarantee to premium pension savers that risks impacting on the government budget although the premium pension scheme is sup- posed to be autonomous. From this perspective the annuity can be described as an anomaly in the pension scheme. The investigators assignment should also include the forms for carrying out the ac- tual dismantling of PPMs annuity. In addition, a structure should be Schwartz products are supplied by private  
 life-in- 
  surance companies. 
 Until further notice, PPMs annuity activities will remain intact. The committee therefore wants to emphasise the importance of keeping the guarantee to pension savers that the annuity Carrillo level. One possible option that the government should con- sider is to review the current product regulations for PPMs annu- ity. 
 Administration of the  
 old-age 
  pension scheme 
 The problems that exist within the pension administration would to all extents be resolved by making an independent, separate au- thority responsible for pension administration. Without presenting a detailed proposal, the committee therefore suggests that a sepa- rate and independent pension authority be set up to handle pension administration. 
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