Swedish pension fund pulls out of Wal-Mart

The 195 billion kronor Swedish second national pension buffer fund, AP2, has withdrawn its bond and equities investments in Wal-Mart Mexico, claiming the firm breaches human rights.

The Swedish fund’s move to offload bond and equity securities worth 200 million kronor follows the Norwegian Government Pension Fund’s decision to end its investments in the retailer in June, also citing employee rights concerns at the world’s largest retailer.

“Dating from 2003, the Second AP Fund has written letters, exercised its voting rights at AGMs and participated in an investor group to influence the company, but the company has failed to indicate any change in its attitude to employee rights,” AP2 said in a statement.

The fund cited evidence gathered by the Norwegian Council on Ethics, which acts as an advisor to the Norwegian State Pension Fund.

According to the council’s recommendation last November: “An extensive body of material indicates that Wal-Mart consistently and systematically employs minors in contravention of international rules.”

The report also argued that working conditions at many of Wal-Mart suppliers were “dangerous or health-hazardous.”

Runar Malkenes, spokesman for the Norwegian Finance Ministry, which is responsible for the Government Pension Fund, Told Thomson Investment Management News: “When other funds, like the Swedish pension fund (AP2), follow our decision we see it as a recognition of the fact that our decisions are based on thorough and solid work.”

Eva Halvarsson, AP2’s CEO, said: “Wal-Mart has so many documented incidents concerning the infringement of norms, both within its own operations and throughout its supply chain that, in our opinion, the existence of an inherently unethical system is placed beyond all reasonable doubt.”

Rosen said AP2 is currently in talks with other companies on corporate governance and ethical issues, but stressed the fund saw divestments as a last resort when negotiations come to no fruition.

Wal-Mart was not available for comment.


Sweden to increase retirement age from next year

A proposal for changes to Sweden’s pensions system could see incremental increases to retirement age beginning next year.

Sweden to increase retirement age from next year
Photo: Hasse Holmberg/TT

The proposal for reform to state pensions has been agreed on by parties on both sides of the political aisle, reflecting the political agreement which provided for the new Swedish government.

Later retirement age has been justified by the claim that people in Sweden “live longer and healthier lives”, but the last twelve years of life remain characterised by illness and failing health, news agency TT writes.

According to the proposal, the minimum age at which a state pension may be drawn will increase next year from 61 to 62 years. The right to retain employment, the so-called LAS age, will also be increased, from 67 to 68 years.

“We see a problem with the fact that people who want to continue working are not able to. We will now give people the opportunity to do that,” said Mats Persson of the Liberal party, who was part of the parliamentary group behind the proposal.

In 2023, retirement ages will increase again, with the minimum state pension age changing to 63 and the LAS age to 69. The so-called guaranteed pension, which is paid to those who have had little or no pension-qualifying income during their working lives, will also see an increased age limit from 65 to 66 years.

2026 will see further extensions, to 64 years and 67 years for the regular and guaranteed pensions respectively.

In a press statement, the government wrote that longer and healthier lives made the reforms to retirement age possible. Average life expectancy in Sweden has been found to increase by 3.5 hours every day.

But longer life expectancy does not necessarily correspond to better health in senior years, according to research.

International studies led by the Institute for Health Metrics and Evaluation (IHME) and the University of Washington recently found that Swedes have relatively high life expectancy – just under 82 years for both women and men – but that years with good health are considerably fewer, at just under 70 years.

Sweden fell outside of the top ten for countries with the most years of good health, the study found. Japan was the best-performing country, followed by Singapore, Andorra, Iceland and Cyprus.

The pensions proposal could therefore mean that retirement years will become increasingly unlikely to contain many years in which senior citizens can enjoy good health.

Persson told TT he disagreed with that conclusion.

“This agreement is based on the fact that we live longer as well as healthier lives. There is research to support that,” he said.

READ ALSO: How to manage your pension in Sweden – even if you're not planning to stay