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The Swedish pension system after twenty years: Mid-course corrections and lessons

Author

Listed:
  • Kent Weaver
  • Alexander Willén

Abstract

Elements of the Swedish pension reform enacted in the 1990s have served as a model for reform initiatives in a number of other countries. Sweden’s experience suggests that a Notional Defined Contribution (NDC) pension reform can be sustained in a supportive political environment, but it has not been immune to electoral pressures to prevent visible cuts in pension benefits. Moreover, efforts to lengthen working lives have encountered major barriers both in the way that the state pension system is perceived and in the structure of the occupational pension system. Design of Sweden’s individual account tier has major successes in lowering administrative costs and in providing information across sources of retirement income, but efforts to increase active engagement in selecting retirement savings portfolios have faltered. Sweden has modified its new pension system in several ways over the past decade to address perceived problems and political concerns, and debates are now arising on a “Pension Reform 2.0” package of more comprehensive changes. JEL classification: H5, H55. Keywords: Pension reform, pension system, income contribution, retirement, stabilising mechanisms.

Suggested Citation

  • Kent Weaver & Alexander Willén, 2014. "The Swedish pension system after twenty years: Mid-course corrections and lessons," OECD Journal on Budgeting, OECD Publishing, vol. 13(3), pages 1-26.
    • Handle: RePEc:oec:govkaa:5jxx3sx58x9t
    DOI: 10.1787/budget-13-5jxx3sx58x9t
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    Citations

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    Cited by:

    1. Frédéric Gannon & Florence Legros & Vincent Touzé, 2020. "Sustainability of pension schemes. Building a smooth automatic balance mechanism with an application to the us social security," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(6), pages 377-401.
    2. Christine Mayrhuber, 2020. "Neue Formen der Pensionsvalorisierung für Österreich," WIFO Studies, WIFO, number 67248, April.
    3. Hervé Boulhol, 2020. "Towards a Universal Pension Points System in France," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 55(2), pages 82-87, March.
    4. Adam Hannah, 2021. "Procedural tools and pension reform in the long run: the case of Sweden [The new politics of the welfare state? A case study of extra-parliamentary party politics in Norway]," Policy and Society, Darryl S. Jarvis and M. Ramesh, vol. 40(3), pages 362-378.
    5. Anderson, Karen M., 2021. "Politics and organized interests in Swedish pension policy," WSI Studies 28e, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    6. Anderson, Karen M., 2021. "Alterssicherungspolitik und organisierte Interessen in Schweden," WSI Studies 28, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    7. repec:hal:spmain:info:hdl:2441/1nnmnobpu685qait9jaqir07rn is not listed on IDEAS
    8. Frédéric Gannon & Florence Legros & Vincent Touzé, 2020. "Sustainability of pension schemes. Building a smooth automatic balance mechanism with an application to the us social security," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(6), pages 377-401.

    More about this item

    Keywords

    pension reform; pension system; income contribution; retirement; stabilising mechanisms.;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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