The occupational pension is a supplement to the national pension and is based on agreements between the trade unions and your employer.

It is thus the employer who pays your occupational pension. How it is subsequently administered depends on where you work. If you have an employer who does not have a collective bargaining agreement or is self-employed, you will have to ensure yourself that your pension is built up further.

Two basic models

There are two basic models for the occupational pension: defined-contribution pension or defined-benefit pension.

The defined-contribution pension requires the employer to pay a fixed charge for your pension. Ordinarily, you personally can invest that part in investment funds or traditional insurances. The amount of your final pension may vary greatly depending on how well you succeeded in investing your pension money.

If you have a defined-benefit pension, you are guaranteed a certain per cent of your final salary. You can estimate in advance how much you will receive, if your current salary will be your final salary. The defined-benefit component is often supplemented with a defined-contribution component.

Private employees

Private employees within the LO (the Swedish Trade Union Confederation) sector:

The collective agreement pension SAF-LO is a defined-contribution occupational insurance agreement, currently 3.5 per cent of the salary. You earn pension from the age of 21. All income earns pension credits, even taxable benefits. It is you personally who invests the money.

The pension is paid out life-long, but you can choose a limited period. The earliest retirement age is 55 years. Read more about this at Fora´s website

Privately employed salaried employees

Privately employed salaried employees have the ITP agreement (Industry and commerce's supplementary occupational pension insurance for salaried employees).

ITP is based on a collective bargaining agreement between the Confederation of Swedish Enterprise and the Federation of Salaried Employees in Industry and Services (Förhandlings- och samverkansrådet PTK).

ITP is defined-benefit and changes in pace with the development of pay. Your final salary determines how large your pension will be. You can start to earn ITP from the age of 28 at the earliest and, in order to receive full ITP, 30 years' pensionable time of service is required.

One part of the ITP is referred to as 'ITPK', where the 'K' stands for supplement. The charges for ITPK are paid by your employer (2 per cent), but here you personally decide how the money will be managed. ITPK is paid out for 5 years, although at the earliest from the age of 55. Read more about this at Alecta´s website

Local government and county council employees

Local government and county council employees have the defined-contribution PFA agreement.

PFA applies to people born in 1938 or later and who have indefinite (permanent) employment (at least 40 per cent). As of the date on which you attain the age of 28, the employer will allocate a charge, the amount of which (3.4–4.5 per cent) varies depending on which local government or county council you are employed by.

PFA contains an individual part that you may invest yourself. The employer decides the amount of that part, although at least 1 per cent. The employer can also allow you to invest the entire charge. Read more about this at KPA´s website or SPP´s website

Government employees

For most people born in 1943 or later, the occupational pension agreement PA 03 applies. This agreement contains both defined-contribution and defined-benefit retirement pensions.

The defined-benefit pension is earned from the age of 28. You must have worked for 30 years with at least 20 per cent employment (40 per cent was required before 1 July 2002) in order to receive full pension. The pension is computed on the final salary, which is the average salary of the annual salaries for the last 5 years prior to the year of your retirement. This pension is normally paid out from the age of 65.

Read more about PA 03 Occupational pension (pdf, new window)

You earn an individual pension from the age of 23. The pension is defined-contribution and you personally choose how the charge should be managed. This pension is normally paid out from the age of 65.

Read more about the individual pension and make your choice

You also earn a supplementary pension from the age of 23. This pension is defined-contribution but you cannot decide yourself how the charge should be managed. Kåpan Tjänste is the name of the supplementary pension that is normally paid out from the age of 65 and for 5 years.

Government employees are covered by the agreement concerning the Government Service Group Life Insurance (TGL-S). Read more about the insurance in our folder.

Government and Social Insurance Office Service Group Life Insurance (pdf, new window)

Co-operative employees

Employees of businesses affiliated to the consumer co-operation or non-governmental organisations are covered by KTP (Co-operative Supplementary Pension). This pension is defined-benefit and starts to be earned from the age of 28. For full pension you need to be covered by KTP for 30 years.

Besides KTP, there is KTPK personal pension. This is an retirement pension that is paid out to you for 5 years, but that can also be changed to provide repayment cover for your survivors. Read more about this at KP´s website

To bear in mind:

What applies? Always check with your employer concerning what applies for you in particular. What happens if you become ill, take parental leave, study or become unemployed?

If you may personally invest, think about your choice. Do you wish to have a secure investment or one with high risk? Compare the different insurance companies. What has their previous management been like? What management costs do they have? Which rules apply, for example, for repayment cover?

Think about your family. Do you wish to provide your survivors with good financial compensation? Find out from the insurance companies the applicable rules for survivor's coverage and what applies for repayment cover.