The custodians of about US$180 billion in Swedish pensions are warning that savers in Scandinavia’s biggest economy may not yet have grasped how profound the effect of negative rates will be on their retirement buffers.

Eva Halvarsson, the chief executive officer of the US$37 billion AP2 fund, one of six that make up Sweden’s AP system, says the government may need to take some pro-active steps to prepare Swedes for the bad news. The guidance could be part of an evaluation slated to be delivered this month, she said.

«They have never commented on this issue in particular before, the interest rate situation, but I think they will do that now,» Ms Halvarsson said in an interview. The government needs to «prepare the market for the fact that we can probably not have as high expectations for the AP funds or other investors.»