The Swedish government has taken the first step to reforming the Nordic country’s system of basic security benefits within the pension system – a move welcomed by the Swedish Pensions Agency (Pensionsmyndigheten) which issued a strong warning of failings more than two years ago.
The ministry of health and welfare announced yesterday that the all-party Pensions Group had supported the plan to review basic social security within the public pension system, and that a working group would now be set up to lay the groundwork for the official investigation leading to reform proposals.
The purpose of the review was to make basic welfare for pensioners more efficient, more accurate and have a simpler structure, the ministry said.
Anna Tenje, minister for the elderly and social insurance, and chair of the pensions group, said: “The pension system exists for pensioners, so it is of utmost importance that it’s understandable and effective.
“This review aims to help us ensure that basic protection becomes simpler and reaches pensioners with the greatest need,” she said.
The system of basic welfare for pensioners in Sweden consists of the guarantee pension as well as four additional tax-financed benefits meant to top up income-based pensions that are too low.
Outlining the problem, the ministry said those benefits had been introduced at different times for different reasons, and were all means-tested, but in different ways.
“This makes the overall basic protection complex and often difficult to understand,” it said.
Reacting to the government announcement, Anna Pettersson Westerberg, director general of the Pensions Agency, said her organisation – which administers much state pension provision in Sweden – had already warned that basic welfare was difficult for pensioners to understand.
“This could lead to pensioners who are entitled to some of the benefits risking receiving the wrong amount or not receiving them at all,” she said, adding that as things stood, it was unclear what the goal of basic security for pensioners was.
In 2022, the agency launched a series of reports to analyse how the pension system should work in the future, and prompt debate.
In the first report, the agency took aim at the country’s basic security benefits within the pension system, criticising the status quo as a complicated mishmash and setting out a range of alternative models.
Ole Settergren, the agency’s head of analysis at the time, called on the government to appoint an inquiry to analyse basic protection provision and propose clear goals along with and appropriate rules to achieve those aims.
Rachel is IPE's Nordic correspondent.
She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere.
In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile
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