To achieve its mission to be of the greatest possible benefit to the pension system, Andra AP-fonden’s investment decisions must be based on the system’s future requirements. The Fund has therefore built up expertise in the development and needs of the income pension system.

There are several stages between the terms of reference and the actual investment decision. In the first stage, the Fund’s Board of Directors has specified the terms of reference as the aim to minimise the consequences of the automatic balancing, the ‘brake’, over 30 years. This means that it is only through the brake that there is a link between the return on the Fund capital and pension disbursements. A time horizon of 30 years is assessed to be an appropriate period to fulfil the requirement of generational neutrality.