The Swedish Pensions Agency (SPA) has published a report that analyses ways in which peoples’ pensions could be increased without changing the entire pension system in Sweden.

It noted that whilst it is often discussed that pensions are too low, it is also often stated that the entire pension system must be changed if pensions are to be increased.

The SPA has highlighted three ways in which pensions could be increased without an overhaul of the system, although it warned that all three would have consequences and require difficult decisions to be made.

The first was an increase in pension contribution, which would lead to higher pensions in the long term for future pensioners, as it strengthens the income pension system’s financial system, the SPA noted.

Secondly, the SPA’s report analysed the option of the distribution of surplus within the income pension system, which it stated would lead to a gradual increase in income pensions.

Finally, the report looked at the possibility of a reduction in the advance interest, which changes how pensions are distributed over the payment period.

This would result in younger pensioners receiving a reduced pension while older pensioners would eventually receive a higher one.

In the short term, it would be possible to compensate for the reduced pensions of younger people with a one-off surplus distribution or a contribution increase, the report noted.

“We have gone through possible changes such as how the distribution of the money is made during the time the pension is paid out, which in the long run could give older pensioners more money,” commented SPA analyst and report co-author, Erik Granseth.

“The changes can be introduced individually, or in combination, within the pension system.

“The Pensions Authority does not take a decision on whether or which measures should be implemented. We want the report to be used as a factual basis for discussions and debate.

“One conclusion is that it is possible to raise pensions without replacing the entire pension system, but this is associated with costs and disadvantages.

“The analysed changes have consequences and require difficult further path choices.

“This applies, among other things, to how an increase in the general income-based pension should be distributed between people, systems and over time.

“Our report shows that it is important to take a position on all three changes in an overall way.”

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