The Swedish Pensions Group has agreed to introduce a surplus mechanism to the income pension system, enabling excess funds to be distributed to pensioners.

This new feature, called a ‘gas’, complements the existing automatic stabiliser, or ‘brake’ (bromsen), which limits income pension increases during economic downturns when assets fall or contributions drop, and is lifted once the economy recovers.

The brake and gas apply only to the income pension and do not affect premium, occupational, or guarantee pensions.

The group, which includes representatives from all parliamentary parties, confirmed that a formal proposal for the gas mechanism will be presented and referred to in the autumn of 2025, with the rules on dividends scheduled to take effect from 1 January 2027.

In recent years, the system has accumulated a surplus, and the gas mechanism will enable pensioners to benefit from these surplus funds.

A buffer will remain in place to protect the system from future shocks, ensuring that money is used efficiently for both current pensioners and future savers.

The Pensions Group has agreed on several key principles for distributing the surplus.

For example, the surplus should not be greater than what is needed to finance pensions long term, and any extra funds should be distributed between both pensioners and pension savers.

Additionally, the group also agreed that dividends will only be paid once there is no risk of financial imbalance, and surplus will be distributed when assets in the system are at least 15 per cent higher than its liabilities.

Anything above this level is distributed and will increase pensions.

It also confirmed that the pension system’s remaining debt to the state, which was left over from the reform in the late 1990s, will be written off.

Pension Group chairman and Minister for the Elderly and Social Security, Anna Tenje, said she is “very pleased” to announce the Pensions Group has jointly supported the introduction of gas in the pension system, something she said “has been discussed for a long time”.

"It will mean more money in the wallets of today's and tomorrow's pensioners,” she said.

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