Sweden's pensions system ranked fifth best in the world

The Local Sweden
The Local Sweden - [email protected]
Sweden's pensions system ranked fifth best in the world
Sweden's age of retirement is set to rise. Photo: Henrik Montgomery/TT

An international analysis has concluded that Sweden's pensions system is one of the five best in the world – but there is plenty of room for improvement.


The annual Melbourne Mercer Global Pension Index placed the Swedish pensions system behind the Netherlands, its Scandinavian neighbour Denmark, Australia and Finland.

It was placed in the B category, "a system that has a sound structure, with many good features, but has some areas for improvement that differentiates it from an A-grade system".

The Netherlands and Denmark were the only countries out of 37 included in the final report that were awarded an A grade, with each receiving scores of over 80.

Sweden's index value meanwhile dropped from 72.5 in 2018 to 72.3 this year, but the report stated this was mainly due to updated UN data and a fall in real economic growth reported by the IMF.

The value was divided into three sub-indices: adequacy (benefits, system design, savings, tax support, home ownership and growth assets), sustainability (pension coverage, total assets, contributions, demography, government debt and economic growth) and integrity (regulation, governance, protection, communication and operating costs). Sweden received a B grade in the former two and an A grade in the latter.

The report suggested the Swedish pensions system could be improved by:

  • Further increasing the state pension age to better reflect increasing life expectancy
  • Ensuring that all employees can make contributions into employer sponsored plans
  • Reintroducing tax incentives for individual contributions
  • Introducing arrangements to protect all the pension interests of both parties in a divorce

The easiest way to understand how the Swedish pension works is breaking it down into three parts. There are three different sources: the state, your employer and yourself.

Overall, the amount you receive will depend on factors such as your salary, your other benefits, how long you work in Sweden, when you start collecting your pension, how your occupational pension scheme is structured, and how much you save in private funds. Read more about how the Swedish pension works here.


You can choose to start taking your Swedish state pension at any time after the age of 61, or after 62 from next year according to a new parliamentary decision. The so-called guarantee pension for people on a low income is today paid out from the age of 65, although this is also set to rise over the next few years.

You have the right to keep working until the age of 67 (this is also set to rise), but in theory you can keep working and earning towards your pension for many years after this, as long as your employer agrees to it.

Other countries in the B bracket were for example Canada, Chile and Germany, while countries such as the UK, US and France received a C+ grade and for example India, China and Japan received only a D grade.

You can read the Melbourne Mercer Global Pension Index report in full here. The index is a collaboration between the government, industry and academia in the Australian state of Victoria.


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[email protected] 2019/10/25 17:06
Hats the 5 best in the world. Which is the worst? (in Europe) The UK?

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