Safeguarding bases for book reserves: Rate of interest and tax on returns – assumptions for 2012

Pursuant to regulations regarding technical bases, defined as safeguarding bases for book reserves (FFFS 2007:24), FI shall publish assumptions about the rate of interest and deductions for tax on returns for calculations of technical provisions on FI's website at the end of September each year. The regulations set out the method that should be used to calculate the assumptions.

For financial years concluding after 1 January 2012, the following assumptions shall apply:

• Rate of interest for the assumptions which do not entail a commitment of future compensation for inflation or index adjustment: 3.5 per cent
• Rate of interest for assumptions which entail a commitment of future compensation for inflation or index adjustment: 1.1 per cent
• Deduction from the above interest rate assumption when obligated to pay tax on returns: 0.5 percentage points

Stated interest rates are the highest that may be applied. Lower interest rate assumptions are allowed. The assumptions may also be applied for financial years that concluded no later than 31 December 2011.

FFFS 2007:24 and the full document stating the assumptions are available below (in Swedish).