When Germany looks to Sweden on Pension, Sweden should look at itself 

Germany's interest in adopting Swedish-style funded pensions signals a fundamental shift in European pension policy. But what does this mean for Sweden itself? "How much domestic risk should households carry through their pensions when they are already heavily exposed to national economic performance through employment, housing, and taxation?"

This white paper examines the critical tension between the promise of funded pensions and the real risks they create. It explores three interconnected questions:

• National Exposure: How much of Swedish pension assets should be exposed to Sweden, when households already bear concentrated domestic risk
• Institutional Concentration: Whether too much capital in too few institutions reduces market pluralism and competition
• Member Agency: How institutions can justify value-laden investment decisions when members cannot meaningfully choose

• Funded pensions don't eliminate risk—they reallocate it from demographics toward markets, fees, and institutional design
• A Swedish household faces cumulative exposure to national economic performance through multiple channels
• Large pension institutions like Alecta create both efficiency benefits and concentration risks
• Pension members often cannot freely choose their exposure to home bias, climate priorities, or defence holdings
• Pension policy is fundamentally about how societies distribute long-term risk and organize ownership