IDEAS home Printed from
   My bibliography  Save this paper

The Swedish Pension System and the Economic Crisis


  • Annika Sundén


The steep drop in financial markets in 2008 coupled with the ongoing economic recession pose immediate challenges for some public pension systems, particularly those that rely partly on equity investments. In the case of Sweden, the crisis provides an initial ‘stress test’ for a major pension system reform implemented earlier this decade. The new system created by the reform was designed to be fiscally sustainable by including automatic adjustment mechanisms to maintain balance in response to short-term economic and financial fluctuations and long-term demographic changes. Last fall’s plummeting stock market produced a decline in Sweden’s pension reserve funds and triggered a first-time automatic reduction in the pension indexation scheduled to occur in 2010. In response, policymakers decided to spread out the required adjustment over a longer period. This brief is organized as follows. The first section describes how the Swedish pension system is designed to maintain fiscal stability. The second section documents trends in the system’s financial status. The third section explores the potential impact of the economic crisis on pension benefits under the system’s original rules. The fourth section describes the policy response. The final section concludes that even automatic adjustments may produce offsetting political considerations.

Suggested Citation

  • Annika Sundén, 2009. "The Swedish Pension System and the Economic Crisis," Issues in Brief ib2009-9-25, Center for Retirement Research, revised Dec 2009.
  • Handle: RePEc:crr:issbrf:ib2009-9-25

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Laurent Calvet & Adlai Fisher, 2002. "Multifractality In Asset Returns: Theory And Evidence," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 381-406, August.
    2. Ľuboš Pástor & Robert F. Stambaugh, 2012. "Are Stocks Really Less Volatile in the Long Run?," Journal of Finance, American Finance Association, vol. 67(2), pages 431-478, April.
    3. George A. Akerlof, 2009. "How Human Psychology Drives the Economy and Why It Matters," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1175-1175.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Grech, Aaron George, 2015. "Pension reforms in the 1990s and during the financial crisis: More of the same?," MPRA Paper 66894, University Library of Munich, Germany.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:crr:issbrf:ib2009-9-25. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Grzybowski) or (Christopher F Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.