The Pension school

The way to understanding your pension
In order to keep up to date with everything happening with our pensions, you need to know quite a lot.

Our ambition is to explain, as simply and clearly as possible, what is often viewed as both complex and difficult to comprehend.

Our hope is that we will be able to create order and structure concerning the provisions and system of rules, and also penetrate a little more deeply into the finance, legislation and other social factors that influence our pension.

We start with the basics by providing a general review of the Swedish pension system.

The pension pyramid

National pension

The basis is the national pension, which everyone receives and which is paid out by the Insurance Office. The national pension is a statutory pension and forms part of our social insurance system.

The new pension system covers people born in 1938 or later and started to be paid out in 2003. The national pension comprises three components:

Income pension – which is based on your entire life income
Premium pension – for individual investment in funds
Guarantee pension – the lowest level that is paid out

The old system (basic pension and national supplementary pension (ATP) remains for people born in 1937 or earlier.

You earn money for your national pension during your entire life – when you work, study, undertake compulsory military service or are at home with infants. The outcome is also based on economic developments.

The normal pension age is 65 years, but you can decide to retire with a pension already at the age of 61 or to continue to work until you have attained the age of 67. The earlier you retire with a pension, the lower the pension will be – and vice versa.

Information: The Insurance Office annually sends out individual details with a preliminary estimate in the “orange envelope”. Questions are answered by your local insurance office.

Occupational Pension

For the period that you are employed, you will also receive a occupational pension, sometimes also called a ‘collective agreement pension’. This is based on an agreement between the trade unions and your employer and means that you will receive a certain portion of your pay as a pension. The occupational pension is paid out by different pension institutions, depending on whether you work within private industry, local government/county council or have a central government post, etc.

The occupational pension is based on the salary you receive from your employer and the total period of employment. The majority of agreements contain a certain component regarding which you can personally decide the management.

The occupational pension generally amounts to approximately 10 per cent of salary. The collection period is not always optional for the entire pension, but always optional for components of the pension. The employer makes payments for the occupational pension.

Information is provided by your employer or the following pension institutions:

Private salaried employees:
Alecta, 020-78 22 80, from abroad +46 8 441 60 00.

Privately employed workers within SAF-LO:
Fora Försäkringscentral, 08-787 40 10, from abroad +46 8 787 40 10.

Local government and county council employees:
KPA, 08-665 04 00, from abroad +46 8 665 04 00 (non-optional component)
Pensionsvalet, 020-65 01 11, from abroad +46 8 665 04 00 or
SPP, 0771-53 35 33, from abroad +46 771 53 35 33 (optional component).

Government employees:
SPV, 020-65 00 65, from abroad +46 60 18 74 00.

It is not possible to transfer occupational pension to another countrys pension system.

Private Pension savings

In order to create extra basic security for your pension, you can supplement it with your own private pension savings, such as for example:

- individual pension savings
- traditional pension insurance
- fund insurance
- ordinary fund savings

In the case of private pension savings, the money can generally be withdrawn from the age of 55 and for at least 5 years. The tax deductions are advantageous, the savings amounts can be inherited and are exempted from wealth and inheritance tax.

Information: contact your insurance company or your fund manager.

Updated: 4/28/2010