SWEDEN - A deficit is set to arise in 2009 between contributions into and benefits paid by the Swedish National Pension buffer funds, according to a new government report.
In the Sweden's Economy report, an assessment of the development of the international and Swedish economies, an appendix to the Spring Fiscal Policy Bill 2007, the government says: "Due to progressively higher pension benefits, a deficit will arise between contributions and benefits starting in 2009."
The government, however, expects the deficit will be covered by direct returns, "and there will still be a surplus in net lending in 2010".
"Pension benefits are set to rise relatively sharply during theestimated period due to the rising elderly population and the higherpension levels of new retirees. Pension expenditures are set toincrease by nearly SEK50bn (€5.45bn) between 2007 and 2010," a spokeswoman told IPE.
Total assets of the six Swedish National Pension buffer funds at the end of 2006 reached SEK862bn, or 30.4% of GDP, according to the government report.
"Assets in the National Pension Funds grew by around SEK60bn due to growth in value," the report states.
The government said income from pension contributions will exceed pension benefits by the end of 2008.
The Swedish national pensions system consists of the income-related pension with a pay-as-you-go element, collected in the buffer funds, and a funded Premium Pension element.
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