Sweden’s pensions and insurance lobby group has criticised the government for going ahead with a proposal to introduce a guarantee supplement for the state pension, which is aimed at increasing pensions for those on the lowest incomes.
Insurance Sweden said the draft legislation made an already complicated pension system even more difficult to understand, and that in some cases, the change had effects which decreased pensions and disposable income.
Eva Erlandsson, senior economist at Insurance Sweden, said: “The government is choosing to take another step away from the previous cross-party pension agreement on a financially and politically stable pension system.”
She added that an important part of that pact had been “to avoid this type of short-term pension measure.”
The government announced the proposal on 6 April, saying it was based on an agreement between the Social Democrats, the Left Party and the Green Party.
It said the reform would give half a million pensioners SEK1,000 (€97) more every month, with a million pensioners in total receiving extra money averaging more than SEK750 per month.
People in the lowest income bracket receiving up to SEK11,846 a month would get the highest level of guarantee supplement of SEK1,000 per month, according to the announcement.
Insurance Sweden said consultation responses including its own had made several points to the government regarding the plan for the supplement.
These included statements that the basic life-income principle for the pension system no longer applied to an increasing proportion of pension savers, and that in certain cases the guarantee supplement had marginal effects of over 100%, meaning that pensions and disposable income decreased when the income-based general pension increased.
The lobby group, whose members include Sweden’s two largest occupational pension providers Alecta and AMF, said the proposal meant pensions would be increased for a million pensioners, at a cost to the state budget of almost SEK10bn, and said it was still unclear how this would be financed.
In October, Insurance Sweden called on politicians to boost green pensions investments, putting the ball in the government’s court to increase the sector’s sustainable investments, publishing a report listing steps legislators should take to aid companies in investing sustainably.