New podcast episode: Sweden with Mats Langensjö

Changing World, New Opportunities

This week’s podcast is out now! In it, we take a fascinating dive into Sweden’s DC system with Mats Langensjö. First off, we find out how Sweden’s AP funds work. Mats describes one highly unusual feature of the Swedish DC system: a government-run fund selection agency which has the job of hiring and firing fund managers. How did this come about? And what criteria does it use? Mats explains all.

Mats gives us a rundown of the best features of the Swedish system – and confides what worries him most about the future. He explains some of the system’s downfalls – complexity, fragmentation and adequacy fears loom large – and tells us what he would change if he could.

One key point we take away from this episode is how pension systems are often born out of adversity. Mats tells us how the Swedish pension system faced great pressure to move – fast – from DB to DC in the early 1990s, when the Swedish economy was in very bad shape. Thankfully, thanks to Sweden’s collective culture, there wasn’t a backlash. But the move did create some adverse effects.

Mats worries about the adequacy of the system when DC savers reach retirement age, and when there’s a rush to move quickly, there isn’t always time to think everything through – which Mats thinks could have created some of the fragmentation and complexity which is apparent in the system today.

It's a great episode – enjoy!