Pension expert at Folksam: Show that pensioners’ security is important, politician
This is a debate article. It is the writer who stands for the opinions expressed in the text, not Aftonbladet.
Published 2024-04-07 06.00
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full screen If the Riksdag parties seriously think it is important that current and future pensioners should receive a public pension that creates financial security, action is required. We have four proposals, writes Håkan Svärdman. Photo: Jessica Gow, Getty
DEBATE. The public pension is dropping like a stone and today corresponds to 45 percent of the final salary, despite the stated ambition being 60 percent. It’s no secret that many retirees are having a hard time making ends meet, and the high inflation of the past two years has dug deep holes in their wallets.
If the parties in the Riksdag seriously think it is important that current and future pensioners should receive a public pension that creates financial security, action is required. Last year, Folksam presented three measures that could strengthen the public pension.
- Increased pension right which adds up the pensions.
- Use the surplus in the pension system.
- Modernize the guaranteed pension so that it strengthens the value of work.
The measures above increase public pensions by around SEK 30,000 per year, reduce the pension gap between women and men and strengthen the municipalities’ finances, but they cost somewhere between SEK 25 and 30 billion.
Folksam has recently presented one basis with four proposals on how this can be financed for the Ministry of Social Affairs and the majority of members of the pension group.
It has been important for us not to increase costs for employees and employers and not to undermine either the pension system or the state’s financial stability. Folksam does not take a position on which financing option should be used, it is up to our politicians in the Riksdag to decide, we have only counted on the outcome for the state finances and the individual.
Three of the alternatives would give the state a surplus of at least eight billion kroner. The fourth would result in a significant deficit.
Two of the options mean that the AP funds double their transfer to the pension system. Around 2 percent of the AP funds’ capital would then go to the pension system instead of (around) one percent as today.
The pension increase is then financed by those who have built up the funds and the cost is not passed on to future generations.
That the pension system is complicated is evident in the debate. Apples and pears are often confused. The fact that public pensions are falling is missed if one instead talks about the sum of public pension and occupational pension. Then the pension as a percentage of the final salary will of course be better.
The responsibility for a good total pension is then increasingly placed on the occupational pension, i.e. on the employees and employers.
Others include other income in addition to general pension and occupational pension, for example income from capital or grants. Some say that we can reach 60 percent of the final salary if everyone follows the new standard ages.
It’s not really that easy either, even if in our calculations we assume that the target age is followed. But more is needed for secure public pensions.
For more than 100 years, Folksam has helped people save money for their pension and understand how the pension system works.
A stable public pension system benefits everyone. It also provides better conditions for cost-effective occupational pension agreements and creates clarity around the need for private pension savings for those who need to supplement their public pension or occupational pension.
In our documentation and at the meetings with the members of the pension group, we have shown that it is possible to increase the public pensions and at the same time strengthen the treasury. Based on the meetings, we can state that there is a genuine desire and great commitment to find ways forward for the pension system to be stable, long-term and fair.
Our condescension and hope is that our elected politicians act and decide on improvements in the near future. It would benefit today’s and tomorrow’s pensioners.
Håkan Svärdman, pension expert at Folksam
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