“This is truly one of our time’s most important public reviews,”
said the Minister for Social Security, Ulf Kristersson (the Moderate
Party) when he presented the over 500 pages long public review
alongside rapporteur Ingemar Eriksson.
It is exactly one hundred years since Sweden’s first pension reform
was presented. Back then life expectancy was 59 years and the
retirement age 67. Today Swedes’ life expectancy is more than 81 years,
which puts pressure on the pension system. Pensioners are increasing in
numbers and the relation between the number of people in work and
people drawing pensions has shifted. There were several major pension
reforms in Sweden in the 1900s. In 1959 came the ATP reform which
stated the 15 best working years out of 30 would count towards people’s
pension. In 1976 the retirement age was lowered.
“This was part of the 1900s great project – to reduce the part of
life which is spent working. I believe that is a bygone era,” said Ulf
Kristersson.
Success story changes requirements
The suggested changes are, according to the Minister for Social
Security, really the results of a success story, a consequence of the
successful welfare policies of the 1900s which created the historically
unique situation where the number of people living past 100 years has
surpassed the number of deaths in young children. But if we live longer
we must also work for longer.
“If not our pension levels fall short, the burden of supporting
pensioners becomes unreasonable and the financing of welfare comes
under threat”, says the review. So the gist of the conclusion from the
pension review is that we need to find different ways of making it
easier for older people to work for longer, and the report suggests
some 50 ways of doing this.
The review introduces a new term; ‘a recommended retirement age’ to
be used instead of the traditional retirement age. The recommended
retirement age is linked to life expectancy. It should be a no-choice
alternative for those who want to achieve an acceptable pension level.
Age limits will therefore be increased for various types of pension pay
and other benefits. Today people have a legal right to work until they
turn 67. That will rise to 69. It is also possible to draw occupational
and private pensions after the age of 55. From 2017 this will rise to
62. The previous limit for the earliest possible drawing of old age
pensions will also increase from 61 to 62 in 2015, and to 63 from 2019.
The age limit for the so-called guaranteed pension rises from 63 to 65,
and the same applies to sick benefits and more.
65 has long been the benchmark for retirement and it is indeed the
age at which 80 percent of Swedes stop working. But society has an
outdated view on old age, the review claims.
“Age is not a good measurement of employability and health. We
cannot have rules which remove people who are healthy. Our task is
therefore to change the way retirement works,” said rapporteur Ingemar
Eriksson.
A plethora of proposals
Getting people to work past 65 is about more than economic
incentives. There are other obstacles preventing people from staying in
work into older age, the review notes. So how do you change a well
established behavioural pattern? How can people manage to stay in work
for longer?
One idea is to improve work environments. The Work Environment
Authority should be given more resources to work with measures which
help older people manage to stay in work, but also to inform and spread
knowledge about what older people can do in the labour market. There is
also a plan to do more research on which factors push some older
workers out and what makes others stay. Strengthened legislation will
continue to protect against age discrimination, and older people will
be given more opportunities to improve their skills for longer into
their careers. This could allow them to change jobs or develop their
existing career.
One proposal is to grant people aged between 55 and 57 a 40 weeks
student loan. Older students should also be given so-called economic
enhancement grants. Yrkesvux (an adult vocational training programme)
and Komvux (adult education run by municipalities) should create
courses for older people, and job centres should also be giving career
advice for older people. Another proposal includes using tri-partite
negotiations to explore the possibilities for creating more flexible
working hours.
Pragmatic history
The review is now under consideration and politicians and different
parties will have their say. Ulf Kristersson hopes the review, which
has been carried out within the framework of existing pension
agreements, will lead to exciting and constructive debates. Pension
agreements in Sweden are usually arrived at in relative calm, and this
has been noticed internationally, says the Minister for Social
Security.
“In the spirit of Swedish pragmatism we have managed to arrive at a
large pension reform with broad political support without any general
strike, disruptive demonstrations or overturned trucks. Our hope now is
that the review will lead to a long debate and become the platform for
good reform work,” says Ulf Kristersson.
