SWEDEN- A new collectively-agreed supplementary pension scheme for 220,000 central government workers in Sweden has angered employers, who fear it will encourage private sector employees to press for higher employers’ contributions to their own schemes.

Employers’ organisations also fear that the agreement will hamper their negotiation of a new defined contribution-based pension scheme to replace the ITP, the collective agreement on supplementary pensions for 600,000 white collar workers.

The government workers agreement, known as PA-03, was negotiated by the Swedish Agency for Government Employers (Arbetsgivarverket) which has been responsible for negotiating pay and conditions on behalf of government employers since 1994.

Under PA-03, government employers will contribute a total of 4.3% of the employee’s salary to a new contribution-based scheme.

The private sector employees’ umbrella trade union, PTK, has said that it intends to use PA-03 as a model or “template” for the ITP replacement scheme in its negotiations with Svensk Näringsliv, the Confederation of Swedish Enterprise, which represents 47,000 companies in Sweden. Negotiations with Svensk Näringsliv began on Monday (May 6)

Hans Gidhagen, pensions lawyer and chief negotiator for Svensk Näringsliv, said: “This agreement is no help to us, and we have said so to the Arbetsgivarverket. The PTK are already saying to us ‘okay if you can give us 4.3% probably we can have an agreement on it.’”

Gidhagen said that employers’ contributions in the existing Avtal SAF- LO agreement for 1.5m blue collar workers in the private sector are substantially less: “We currently have 3.5% contributions for the blue collar workers scheme. Increasing this from 3.5% up to 4.3% is a lot of money, and the companies are not willing to pay, ” he said.

He added: “It’s a dangerous illusion that the government side and the municipal side sets the limits for what you should have. The government side of the labour market is not supposed to take a lead on the benefits side of labour relations it should be the private sector that sets the norms for salaries and also for pensions.

The agreement, which comes into force on 1 January 2003, has yet to be ratified by the government. The social security minister Ingela Thalen, has expressed surprise at Arbetsgivarverket’s proposals for a “delpension” or partial pension which allows people to take up to 80% of their pension at age 61. This is seen as unhelpful to the government’s longer term aim of extending the retirement age from 65 to 67.