The report argued that this defeats the purpose of having four separate funds. The report, commissioned by the ministry of finance, is used as a foundation for the government’s evaluation of the funds, which will be handed to parliament this week.

The AP funds have long been pushing the government to reform their investment rules, which have been around for seven years and are generally regarded as old-fashioned and restrictive.

“These are the conclusions of an external evaluator, but the AP funds have for some time argued that our investment limits are not right. I don’t think they are suitable for our aim and detailed regulations also have a tendency to get quickly out of date,” said Kerstin Hessius, chief executive officer at AP 3. The restrictions include a minimum allocation of 30 per cent to bonds and a 5 per cent cap on private equity and infrastructure.

Removing the investment rules is also supported by OECD, which believes such restrictions are unnecessary for public pension funds. There are also fears that the funds’ asset allocation will become more similar as time goes by.

“AP 3 differs from other pension funds but that will soon change since we are restricted from diversifying further,” said Ms Hessius.

Ms Hessius is pleased that the issue has been brought to the fore. But, although Hewitt Wassum is hopeful the government will take its findings into account, Ms Hessius is not convinced any change is imminent.

“The parliament’s pensions group has not mentioned investment regulations at all in its recent agenda,” said Ms Hessius.

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