History of the AP funds

1913 – Universal pension insurance

In 1913 Sweden is the first country in the world to pass a law on universal old-age pension insurance guaranteeing coverage for all citizens over the age of 67 years, although not in an amount sufficient to survive on. The pension system is improved in the following decades through the enactment of pension reforms in 1935 and 1946 and the introduction of the basic pension to provide an increased level of pension security.

1957 – Referendum

In 1957 an advisory referendum is held on the introduction of ATP, the general supplementary pension scheme. The alternative for a mandatory general supplementary pension wins the most votes, but not a majority.

In 1959, after several years of political debate, a vote is taken in the Swedish Parliament’s second chamber. The proposal to implement the ATP system wins by a single vote.

1960 – ATP introduced and National Pension Funds established

The National Pension Fund’s First, Second and Third Fund Boards are established in 1960 in connection with the ATP reform in order to secure the long-term savings required by the ATP system. At this time, the rules governing the fund boards permit investment only in fixed-income securities. Asset management in the three fund boards is coordinated in a single organization.

1974 – Fourth AP fund established

The Fourth Fund Board is established in 1974 and is permitted to invest in equities.
In 1976 the retirement age is lowered from 67 to 65 years.

1988 – Fifth AP fund established

A Fifth Fund Board is established which, like the Fourth Fund Board, may invest in equities.
The first three fund boards are given less restrictive investment rules, with an addition permitting investment in real estate.

1996 – Sixth AP fund established

In 1992-1996 the assets of the discontinued wage-earner funds are managed by a liquidation board that later becomes the Sixth Fund Board in 1996. This fund board may invest in equities and risk markets and focuses on small to mid-sized companies.

1998 – Pension system reform

In 1998 the Swedish Parliament decides to reform the national pension system following a five-party agreement. When the reform is enacted in 2000, the fund boards are renamed the First AP Fund, the Second AP Fund, the Third AP Fund and the Fourth AP Fund.

The Sixth Fund Board and the newly established Seventh Fund Board (1998) are also renamed the Sixth AP Fund and the Seventh AP Fund, while the Fifth Fund Board is disbanded.

2001 – Reorganization of the AP funds

The First, Second, Third and Fourth AP Funds and the Sixth AP Fund are so-called buffer funds in the new reformed pension system.

New identical investment rules are adopted for the First, Second, Third and Fourth AP Funds allowing the funds to invest in several different asset classes. The funds operate independently, on mutually competitive terms, and formulate their own investment policies, corporate governance policies and risk management plans.

The reform leads to a number of changes aimed at better adapting the roles of the funds to the new reformed pension system, thereby making the system more stable with an overarching mission to maximize long-term return with a low total level of risk.