SHARE
COPY LINK

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

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

PENSIONS

Swedish pensions dump ‘union-busting’ Walmart

The state-managed funds that invest Swedes' pension contributions have retracted all their investments in Walmart due to concerns over how the American retail giant treats its employees.

Swedish pensions dump 'union-busting' Walmart

“It’s a welcome and wise decision,” said Lars-Anders Häggström, head of retail workers trade union Handels, which has argued that Swedish pension money be kept clear of companies that are “world leaders in union busting”. Freedom of assembly and association is protected by the conventions of the International Labour Organization (ILO).

Contributions to the state-managed pension scheme in Sweden are managed by several distinct funds, entitled collectively the AP Funds (AP-fonderna). The first, third and fourth of the six separate investment entities owned shares in Walmart, but they will now be sold off according to a statement released on Monday.

“We simply couldn’t conceive why the AP Funds would invest in Walmart, when their behaviour is well-known,” Häggström told The Local

In early September, Handels, which represents 150,000 employees in the Swedish retail sector, addressed an open letter to the AP Funds’ Ethics Council asking that it look into the investments in the American retail giant, saying that owning shares was “so stupid it is embarrassing” as well as “unethical”.

“Our union members have expressed astonishment when they found out their pension savings were invested in Walmart,” Häggström told The Local. “If we influenced the AP Funds’ decision today, we are of course delighted.”

In a press release on Monday, the managers of the AP Funds announced they were also divesting from the companies Freeport Mcmoran, Incitec Pivot, and Potash due to ethical concerns.

Ann Törnkvist

Follow Ann on Twitter here

SHOW COMMENTS