Financial security in old age
Sweden has a modern, politically stable system which automatically follows economic and demographic development. This gives long-term stability irrespective of development where there is no risk of the cost of income-based pensions being shifted on to future generations. We thus have a system that also puts us in a good position for being able to provide long-term basic security in an acceptable manner.
Background
Pension systems are based on a very long qualifying period and a payment period that extends over a couple of decades. They therefore affect the individual throughout his or her working life. Keywords of the pension system are security, predictability and a long-term perspective. It is therefore of great value to those insured that the pension system is based on a broad agreement so that the ground rules are not altered when there is a change of government. In addition to this, the general public must also be confident of both the political and financial stability, and act accordingly. Only then can we benefit fully from a stable pension system and its built-in incentives for work. It is therefore important to take proper care of the pension agreement and also to clearly emphasise that in the long term, the pension reform remains firm.
The pension system is constructed to stimulate work. This is most clearly manifested in the lifetime earnings principle, which means that the income earned throughout one's life gives pension rights and affects the size of one's pension. This sends a clear signal that more work results in a larger pension, and also that only declared income counts towards a pension. This helps combat tax crimes. The connection between work and pension is also clear through flexible indexation, i.e. that the upward adjustment of pensions follows economic developments in society. This is necessary in a financially autonomous system, but also logically since in the long term, it is only work and growth that can support a pension system. The Government's measures for employment and growth will therefore benefit pensioners through a better upward adjustment of pensions.
Direction of policy
The pension system affects us during most of our lives, first in that we earn pension rights during our working lives and then that the pension is our main source of income during retirement. To support confidence in the pension system and to ensure that a reasonable pension remains available for quite a few decades to come, it is necessary to have a financially stable system that works regardless of external changes, and to have stable ground rules. But it is important that the rules are not changed to any significant extent. Otherwise there is a major risk that people's life choices are affected by uncertainty about their future income. It is therefore of central importance to the policy that the pension agreement remains firm and that signals to this effect are clear.
Scope of policy
The old-age pension system - which is outside the central government budget - includes the income-based pension system (income-based pensions and supplementary pensions) and the premium pension system (premium pensions).
The policy area Financial security in old age is divided into two areas: Compensation in old age, which includes guarantee pensions belonging to old-age pensions, housing supplement for pensioners and maintenance support for elderly persons, and Compensation in the event of death, which includes survivor's pensions for adults, i.e. adjustment pensions, widow's pensions, special survivor's pensions and guarantee pensions belonging to these benefits.
The objective of the policy area is that people with low income-related pensions, or none at all, must be guaranteed index-linked basic protection. Surviving spouses must be offered reasonable economic support to help during the adjustment period following the death of their spouse.
Agencies and other bodies
The Swedish Social Insurance Agency falls under this policy area.
