SWEDEN - The Swedish government is to be presented with a proposal to set up a new authority to handle the administration of both the Premium Pension Authority (PPM) and the pay-as-you-go income related state pension.

The idea has come from a commission headed by former junior justice minister Hans-Eric Holmqvist. It will be presented to the government on December 15 and it will make a proposal on the issue next spring.

The proposed merger of the responsibilities would in effect see a widening of the PPM's responsibilities to include issuing the state pension. Together with the premium pension this makes up the first pillar of the Swedish pension system. Currently, the state pension is administered by the Försäkringskassan, the government's social insurance office.

"Holmqvist proposes that it would be better to have all automatic pension payments administered by one authority," said market specialist Michael Nyman.

However, payments like the minimum pension, which has to be judged individually from case to case, are to remain with the government board, Nyman explains.

"Only automatic payments are to be handed over to the new authority." This could mean that several thousand people will still have to get their pension payments from two authorities even under the new system.

Christina Lindenius, director general of PPM, thinks the merger is a very good idea: "It is an excellent proposition to form a new authority responsible for the administration of the Pension system, including both Premium pension and Income pension.

"This new authority will be able to provide better information, better service and will make it easier to understand the pension system as a whole. It is very important to see this change from the view of the citizens."

The Försäkringskassan, on the other hand, criticises the suggestion. "We are not against a central authority handling all the pension payments but the simplest an cheapest way would be if the social insurance office dealt with premium pensions." The government body argues that it has local offices all over Sweden in which people can get information on their pensions whereas the new body would only have one central office.

"Holmqvist argues in the report that most people look up the information they need on the internet and he suggests to use the phone to a larger extent," Nyman says. "The report claims that the Försäkringskassan does have to little knowledge of the premium pension system."