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Sweden mulls raising retirement age

Sweden's social insurance minister has announced that the government has appointed a new committee to investigate whether the country should consider raising the retirement age from the current 65.

“There are too many who leave before turning 65 and there are quite a few more who could work past 65 than those who do not,” social insurance minister Ulf Kristersson told reporters on Tuesday, adding that he does not actually foresee Sweden maintaining a fixed retirement age in the future.

The first relatively simple step compared to other possible changes would be to increase the limit on the age an employee can legally stay at a job from 67 to 69.

“As average life expectancy rises and the material demands in old age increase, more people will have to work a bit longer than today. Otherwise, pensions will shrink,” he said.

The new pension commission, whose directives have not yet ben formalised, should take a broad approach, according to Kristersson.

“We want to have a broad analysis of how people can work a little longer,” he said.

Kristersson pointed out that even in the short time since the centre-right parties and the centre-left Social Democrats agreed in the 1990s to reform the country’s pension system, average life expectancy for men has increased by two years and one year for women.

The analysis will also include examining whether workers should usually retire at 65, as is current practice, or whether they may wait longer before leaving the workforce.

The opposition Social Democrats say that they want to concentrate on reforms so that more people can work until they are 65 instead of retiring earlier.

“Our priority is not to raise the age limit,” said Social Democrat Tomas Eneroth, vice president of the Riksdag’s social insurance committee and the party’s representative in the pension working group.

Eneroth thinks that the ruling Moderates and the government unfortunately locked themselves into a retirement age of 69 in the government’s policy declaration.

However, he added that at the same time, he appreciates that Kristersson says he wants a broad review of the possibilities of producing more hours worked.

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PENSIONS

Sweden to increase retirement age from next year

A proposal for changes to Sweden’s pensions system could see incremental increases to retirement age beginning next year.

Sweden to increase retirement age from next year
Photo: Hasse Holmberg/TT

The proposal for reform to state pensions has been agreed on by parties on both sides of the political aisle, reflecting the political agreement which provided for the new Swedish government.

Later retirement age has been justified by the claim that people in Sweden “live longer and healthier lives”, but the last twelve years of life remain characterised by illness and failing health, news agency TT writes.

According to the proposal, the minimum age at which a state pension may be drawn will increase next year from 61 to 62 years. The right to retain employment, the so-called LAS age, will also be increased, from 67 to 68 years.

“We see a problem with the fact that people who want to continue working are not able to. We will now give people the opportunity to do that,” said Mats Persson of the Liberal party, who was part of the parliamentary group behind the proposal.

In 2023, retirement ages will increase again, with the minimum state pension age changing to 63 and the LAS age to 69. The so-called guaranteed pension, which is paid to those who have had little or no pension-qualifying income during their working lives, will also see an increased age limit from 65 to 66 years.

2026 will see further extensions, to 64 years and 67 years for the regular and guaranteed pensions respectively.

In a press statement, the government wrote that longer and healthier lives made the reforms to retirement age possible. Average life expectancy in Sweden has been found to increase by 3.5 hours every day.

But longer life expectancy does not necessarily correspond to better health in senior years, according to research.

International studies led by the Institute for Health Metrics and Evaluation (IHME) and the University of Washington recently found that Swedes have relatively high life expectancy – just under 82 years for both women and men – but that years with good health are considerably fewer, at just under 70 years.

Sweden fell outside of the top ten for countries with the most years of good health, the study found. Japan was the best-performing country, followed by Singapore, Andorra, Iceland and Cyprus.

The pensions proposal could therefore mean that retirement years will become increasingly unlikely to contain many years in which senior citizens can enjoy good health.

Persson told TT he disagreed with that conclusion.

“This agreement is based on the fact that we live longer as well as healthier lives. There is research to support that,” he said.

READ ALSO: How to manage your pension in Sweden – even if you're not planning to stay

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