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But what does it all mean? How to decipher Sweden’s orange pension envelope

But what does it all mean? How to decipher Sweden's orange pension envelope
Understanding this brightly coloured document is the first step to making informed decisions about your financial future. Photo: Jennifer Glans/Pensionsmyndigheten
Over the next few weeks, orange envelopes will be sent out to people across Sweden with important information about your pension. The document can feel intimidating, but here's what you need to know in order to decipher it.

The exact contents of your orange envelope (or orange kuvert as it's known in Swedish) are unique to you. The numbers depend on things like your own salary, years spent working, and pension policy.

The first page of the document shows how your general pension and any premium pension has changed over the past year; this is your årsbesked or annual summary. 

All figures are given both for your inkomstpension (income pension, into which 16 percent of your taxable income is paid each year) and premiepension (premium pension, an extra 2.5 percent which goes into funds). The figures for the inkomstpension are almost always quite a bit higher.

Together, these two accounts make up your allmän pension (general pension), which would be added to any occupational pension and/or private pension once you reach retirement age.

The document is sent out in Swedish, but you can see an example of the pension statement in English here, which you can then compare to your own (here's the 2021 version in Swedish). Here's a closer explanation of what the key terms mean:

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See also on The Local:

Värde 

This means value, and you'll see a value for the amount that was in your pension at the turn of the year (2019-12-31) and, at the bottom of the table, how much was in your pension at the end of 2020 (2020-12-31). 

Beslutad pensionsrätt

This figure is exactly how much you had earned in your income pension in the last declared tax year.

Arvsvinster

Pension capital for a deceased person is sometimes distributed among their next of kin. If that's the case, the amount goes in this row, the title of which literally means 'gains from inheritance'.

Administrations- och fondavgift för inkomstpension och premiepension

These are the administrative fees you pay for your pension accounts.

Värdeförändring

Literally 'change in value', this figure is based on income changes across all of Sweden, and it's a set percentage each year. This is set to 2.2 percent in 2021.

Summa intjänad allmän pension

This is the key line on the first page, meaning 'total accrued general pension', which adds together both your income pension and premium pension. This is the figure that's used to make your pension forecast, which are on the second page of the document. 

Din premiepension

Also on the first page, you'll see a detailed breakdown of your premium pension. This shows which funds you have chosen to put this portion of your pension in, and how they have developed over the past year. 

You can choose up to five different funds for your premium pension if you want to – otherwise it goes by default into AP7 Såfa, the Seventh AP Fund (National Generation Management Option). The table shows the change in value (värdeforändring) and the fees associated with each fund (fondavgift).

Den genomsnittliga pensionsspararen

This row of the table shows a fee and total change in value for 'the average pension saver' in Sweden. That gives you a starting point for deciding if you're happy with the current funds you have, or if you would like to change them.

Beslut om dina pensionsrätter

Onto the second page, and this shows how much you have earned towards your public pension during the last declared tax year (that's 2019, since taxes for the year 2020 haven't been declared yet). It shows your pensionable income (din pensionsgrundande inkomst), and how much you have earned towards both your income and premium pensions.

The orange envelope does not show the occupational pension which is provided by many employers in Sweden, or any private pension you are saving towards.

If you have more questions about how you can maximise and keep track of your Swedish pension, however long you plan to stay here, check the articles below: 

Jobs in Sweden

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