Pensions in Sweden
Everyone who has lived or worked in Sweden is entitled to a pension. The Swedish Pensions Agency administers and pays out the national pension.
How it works
'How it works' describes this area in Sweden. We discuss the rules, strategies and action programmes that govern the area and present the fundamental principles. You will also find the government agencies or other bodies that are responsible.
The national pension is the pension paid by the Swedish State. The idea is that everyone who has lived or worked in Sweden should have basic security when they retire. The amount a person receives as their pension depends on how much they have earned, how long they have worked and how incomes in Sweden have grown.
The provisions governing pensions are contained in the Social Insurance Code.
Retirement age is flexible
There is no set age at which people must retire, but a pension can only be drawn from the age of 61 onwards. Nor is there an upper limit on how long a person may work, and everyone is entitled to work until the age of 67.
Pension level depends on how incomes grow
Alongside salaries, employers also pay a pension contribution. If salaries in Sweden show healthy growth, the proportion paid into pensions by employers will be higher. If salary growth is lower, pensions will be lower. How much money is paid into the State pension pot also depends on how long the population work and have incomes.
Those who are working pay current pensioners
The money paid to the State on incomes in a given year is paid out to those who are pensioners in the same year. When those who are working and have incomes today become pensioners themselves, their pension money will come from what the next generation earns. In practice there is, therefore, a contract between the generations that the working generation always pays pensions to current pensioners to the same extent that the pensioners previously paid when they were working.
Pensions must be sufficient for future generations
The reason why Sweden has a pensions system that follows how incomes change over time is that pensions must be sufficient in the long term. Regardless of how Sweden's economy develops and how many pensioners there are, the State must be able to pay out pensions to future generations too. Five parties represented in the Riksdag - the Moderate Party, the Liberal Party, the Centre Party, the Christian Democrats and the Social Democratic Party - agreed on this principle in the Pension Agreement.
The national pension consists of three parts
The national pension consists of
- Income-based pension
- Premium pension
- Guarantee pension
In addition to this, most people receive an occupational pension from their employer. Many people also have private pension savings with banks or insurance companies.
The income-based pension is the main part of the national pension system and is based on total earnings throughout life. The longer one works the higher pension one receives. Income includes salaries, sickness benefit, unemployment benefits, etc.
The premium pension is also based on lifetime earnings. It is placed in funds and everyone may choose their own funds.
The guarantee pension is there for those who have had little or no income for work in their life. It is linked to the price base amount calculated annually by Statistics Sweden. The size of the guarantee pension depends on how long a person has lived in Sweden.
Several benefits are linked to pensions
In addition to the national pension, pensioners with low pensions may be entitled to a housing supplement.
Spouses and children of people who have died are known as 'surviving relatives'. They may be entitled to a survivor's pension, designed to cover some of the income that the deceased person provided.
The Swedish Pensions Agency administers the national pension
The Swedish Pensions Agency administers the national pension and related pension benefits, and provides information about them. The Swedish Social Insurance Inspectorate ensures that the Swedish Pensions Agency conducts its administration with due process and efficiency
Swedish Pension Authority decisions may be re-examined
Anyone who is dissatisfied with the Swedish Pensions Agency's decision may request that the Agency re-examine the decision. If they are still dissatisfied with the re-examination decision, it is possible to appeal to an administrative court, then to an administrative court of appeal and finally to the Supreme Administrative Court.
Anyone who considers that they or anybody else has been treated incorrectly by a government agency or official in the processing of a matter can also file a complaint with the Parliamentary Ombudsmen.
Relevant rules and documents
Social Insurance Code (2010:110).