Swedish occupational pensions may be influencing Swedes to retire before the state’s target pension age, according to new research by the Swedish Pensions Agency (SPA).

This is because in some occupational agreements, pensions begin to be paid automatically before the target retirement age for the public pension.

Commenting, SPA analyst, Erik Ferm, said: “Occupational pensions in some agreements are paid out automatically before the target age, which in practice may lead many to think it is time to start drawing their pension.”

The Swedish parliament decides the target retirement age and determines when different parts of the public pension can be drawn.

The target age is adjusted according to changes in life expectancy. It determines the earliest age at which the income pension and premium pension can be taken, as well as the age limits for the guarantee pension and housing supplement.

However, around nine out of 10 workers are covered by an occupational pension. SPA’s report found that differences in pension ages and payment conditions between the four largest collectively agreed occupational pension schemes have increased recently.

In the private sector, the Avtalspension SAF-LO and ITP occupational pensions all begin to be paid automatically before the target age for the public pension and before the age when individuals qualify for the higher basic tax allowance.

In the municipal, regional and state sectors (AKAP-KR, KAP-KL and PA 16), the automatic payments instead begin later, after the target age.

“The fact that the agreements differ is part of the Swedish model, where labour market parties negotiate the terms. At the same time, the variation makes the pension system more complex for individuals,” Ferm stated.

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