Swedish MPs pensions to keep unfunded DB structure
SWEDEN - Reforms of the pension provision for the Swedish members of parliament will not now change the current unfunded defined benefit structure.
A spokeswoman at the Swedish parliament, Riksdagen, said there have been considerations for a funded defined contribution solution. However, it is no longer on the cards as it was found that the current Swedish tax law would make a change to a funded DC system less advantageous to members.
Other government employees, aside from members of parliament, have access to a funded pension scheme via Kåpan. The scheme was created in 1991 and has over 600,000 members, with assets of SEK34bn (€3.28bn), after returning 8.5% to the end of August.
The parliament spokeswoman said even though the new system remains an unfunded DB system, it has traits of a DC system in that the final pension is dependent on the combined earnings of the time in parliament, rather than based on the final years of earnings.
The reforms for the Swedish MPs pensions are designed to be fairer, particularly for the younger members. From 1 January 1 2010, MPs' pensions will be calculated equally irrespective of age, and all time served up to a maximum of 30 years will count for a final pension.
It was previously possible for Swedish MPs to earn a full old-age pension in just 12 years.
The reform will also facilitate the movement "in and out of politics', without losing benefits.
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