A financially sustainable system


The fact that the pension system is outside the government budget and pays out exactly as much in pensions as money is available for makes the pension system financially sustainable, which means that there is no risk of rolling over debt to future generations. This, combined with political stability — a large majority of Riksdag members backed the system — paves the way for secure pensions.

Photo: TT

The greatest driving force behind the pension reform was the fact that the supplementary (ATP) system suffered from inherent financial instability. The second major reason for radical reform was the conviction that the basic pension and ATP systems did not sufficiently stimulate people to seek gainful employment.

The pension system is stable because pension size is determined by average life expectancy and because income-based pension paid out and pension credits follow wage developments. There is no fixed retirement age in the Swedish pension system.

The national pension system is part of the Swedish social insurance system. It covers everyone who has worked and lived in Sweden. It is made up of income pension, premium pension and guarantee pension. Review and reform of the pension system is an ongoing process.