(edit title) Swedish occupational pension system dismantled Am I the only one to have noticed it. Options

[Essingen]

The occupational pension scheme has now effectively been dismantled in this country, at least for new entrants. A typical scheme will give you about 4.5% of your salary to invest up to around SEK 33,300. This replaces a standard guarantee of 10 % of your salary. This amounts to some SEK 15,000 max...peanuts in other words...

Over 4.4% the standard now seems to be to give you 30% to invest...replacing a guarantee that you would get 65 % of your salary over this amount as pension. So, not only have the amounts been reduced by all risk has been neatly pushed on to the employee. My own union seems to think that they have achieved something by doing this and describe it as a "modern" pension system. Complete twats!

What this means, is that for the vast majority of people, there is little prospect of getting anything other than very modest amounts over and above what appears in the orange envelopes.

It is quite amazing that this process has been carried out without any resistance whatsoever. If you are young, start saving.

[rtharper]

What are you complaining about is the transition from defined-benefit pensions to defined-contribution ones. The former have been shown to be unsustainable over the long run, meaning that more or less the "risk" you talk about cannot actually be bourne by the fund, anyway, and still be actuarially sound. You may hate this reality, but it's true. What you are asking by demanding it is that younger workers pay for your retirement guarantee, and such a pyramid scheme can only go on for so long. The pension contributions are, in my opinion, quite generous. Pension funds are generally well managed and you can expect as a good of a return as the market will allow for low-risk invenstments. You are also always free to save your own money, and there are tax-efficient ways to do this.

[Svensksmith]

Retirement is fast becoming an unattainable goal to all but the wealthy or lottery winners. Most of us will have to work to the grave. Meanwhile, unemployment among youth is rising rapidly.

[Essingen]

What are you complaining about is the transition from defined-benefit pensions to defined-contribution ones.

That is not the only thing I am complaining about...the other major component is that the amounts that empoyers contribute is being significantly reduced at the same time.

The former have been shown to be unsustainable over the long run, meaning that more or less the "risk" you talk about cannot actually be bourne by the fund, anyway, and still be actuarially sound.

The risk has always been taken by the employer...if the fund has not been able to meet is liabilities the employer coughs up more, if it has an excess it the employer often has a contribution holiday.

[rtharper]

That is not the only thing I am complaining about...the other major component is that the amounts that empoyers contribute is being significantly reduced at the same time.

You are free to negotiate that with your employer, and salary deferral is possible in Sweden, I believe. Have you done any calculations on the final implications of such a setup, by the way? It is quite possible to save under this scheme, it is not designed to leave people penniless.

[Essingen]

Salary deferral is indeed a good idea. This is something I did for a number of years with a previous employer. However, it isn't all employers who offer it. My own position is pretty OK actually but for new people the situation is pretty grim.

[rtharper]

Perhaps I am less sympathetic because defined contribution pensions have been a standard thing for people my age (27) outside of the public sector, and I don't feel that weird at all about needing to save

[Yorkshireman]

You are always free to contribute to a private pension insurance/fund. In that way You are not tied to the employer and the scheme they contribute to. (though that has been freed up a little in recent years)

There are tax breaks for that also, basically You can make a tax deduction of maximum 12.000:- per year.
Which means if You want to maximise it, pay 12.000 into a pension fund and You get the full refund, if You expected to pay 12.000 then double it, so you pay 24.000 and get 50% back.

If You have own business, then that changes slightly and You can deduct 12.000 + 35% of income, as maximum deduction ... up to a maximum of around 420.000+ per year.