friends in the Group!
get all statements that I could about the new pension system in Sweden I have
contacted the two big authorities, National Social Insurance Board (RFV) and Premium Pension Authority (PPM). I have also received a lot of
material from the swedish pension expert, KG Scherman, who is a former DG for RFV
in Sweden and now is a member of the
pension policy group in AGE. I will insert some commentaries from him (AGE)
when I come to the end of my report.
I must give some basic commentaries
from a comprehensive point of view:
the new pension system in Sweden is the demand for work and income to have a
good pension fundamental higher than
in the old system. A person of 30 age today can count upon a pension
corresponding somewhere between 40 to 45 percent of his final salary from the
age of 65. To this will come the occupational pension who will give about 10
the new pension system will the greater part of the
paid income related pension be converted into that so called consistency index.
That means that the add up will be done corresponding to compensation
development minus 1,6 percent.
Already in the shape of the rules it is provided that pensions when they
once is appropriated not will follow
automatic balance is a mechanism
which beyond all other restrictive elements in
the new pension system emerge in function if income will not be enough.
If state finance will be in unbalance this mechanism will come in function and reduce pensions so much that needs to
restore the finance balance.
has a new national (public) pension system from 1999 and the first pensions from
the new system were paid 2001.
premium- and guaranteed pension
national pension consist of income pension, premium pension and - for those with
a low income or no income - guaranteed pension. Together they compensate the
earlier old-age pension system and ATP-system.
life is counted
public pension depends amongst other things on how much you earn during the time
you live in Sweden. It means that in principle all what you earn and pay taxes
for give pension. But you only got pension for yearly income up to a certain
ceiling. The income ceiling is 7,5 base amounts
per year, which means about Euro34.500 in 2004.
real income even so called fictitious income give pension rights. They are
called pension qualifying income. Pension qualifying income you can receive for
year with small children (so called childcare years), currently retired, doing
national service and for higher studies.
percent plus 2,5
percent of your pension qualifying income and also other income (for instance
unemployment relief and sick pay) up to that income ceiling are reserved to an
pension charge who finance the pensions. 16 percent go to income pension and 2,5
percent to premium pension.
Guaranteed pensions are financed with taxes. .
pension is a distribution system as ATP was, meaning that the charges who comes
in direct are forwarded as pension to those who are pensioners today. In a
equivalent way will your pension be paid from those who works when you are
percent of your pension qualifying income and other tax duty compensations go to
the income pension. Your pension rights for the income pension are added year
after year and become, after enumeration with the common wage development in
society, your right to income pension when you become
percent from your pension qualifying income and other tax duty compensations go
to the premium pension. You who are born before 1954 become a lower percentage.
These money who are reserved for premium pension are not paid to the today
pensioners but are saved to be paid to you when you become a
money are invested in share- or rate funds which you can chose up to five
yourself among about 600 who are available and the value growth then decide how
great your premium pension will be. You are allowed to change funds without any
costs. You may also transfer your premium pension rights to your husband /wife,
but the balance transferred will be
reduced by 14 percent.
pension is a basic security pension. For anyone whose lifetime earnings have
been low, or who has had no earnings at all. It guarantee that nobody become a
lower pension than Euro 675 per month if you are married and Euro 760 if you are
alone. It can at some events completes with a housing
pension can be used at 65 years age. You must have lived at least three years in
Sweden to apply for it and to receive a full guarantee pension it demands that you have lived from your
25th birthday until your 65th birthday. For certain other groups,
such as refugees entitled to protection, special rules
pension are financed with taxes.
are included to the public pension?
groups of age are included in a different way of the public
who are born 1937 or earlier are not included to the public pension system. You
got your fully pension from the old ATP-system.
who are born the year 1938-1953 got your pension both from the old and the new
pension system. How great part you become from the respectively systems depends
on which year you are born.
instance will that one who is born 1938 become 4/20 of his pension from the new
system and 16/20 from the old system. That one who is born 1939 become 5/20 from
the new and 15/20 from the old system.
to that so called guarantee rule you are guaranteed at least the same pension
which you have earned in to the ATP-system until 1994.
1995 your income give you right even to premium pension.
you born 1954 or later you are fully included in the new pension system. All the
ATP-points you have earned are recounted to pension rights for the income
pension. Your income from 1995 give you also right to premium pension.
aware of that this report are in the shortest manner but I prefer to give it to
you that way instead of making a very long and comprehensive one as I myself is
not an expert. The opinion about the new pension system is very different
depending upon whom you ask. Our politicians like it, the people don´t know very
much about it (it was negotiated in the so called “small rooms” in our
parliament) and the organisations for pensioners hav´nt protested too much. The
system are what we can afford in future
from our politicians point of view.
lot of representatives from the European
governments had visited Sweden in order to learn more about our system
and how our politicians behaved to prize it through the parliament and have it
accepted by all parties.
pension policy group in AGE have set
up some common directive rules and policies and also sent over a report to the
EU-top meeting in March 2003, what is fundamental in the coming reform activities. They
have also a lot of point of views related to the new Swedish system.
may show us how other countries in Europe will act in order to reform their
systems. A lot of the countries are just now working very hard with these
matters and are right in the thick of there efforts .Big countries as Germany
and France have already meet a lot of opposition and have “a long way to go” before they
can come through.
lot of experts agreed about the necessities to work longer time each week and
create growth in society. Without that coming generation (children and grand
children) will have a very difficult future. What are we leaving to them?
Sweden v. president in the Group