SHARE
COPY LINK

MONEY

Sweden’s pensions system ranked fifth best in the world

An international analysis has concluded that Sweden's pensions system is one of the five best in the world – but there is plenty of room for improvement.

Sweden's pensions system ranked fifth best in the world
Sweden's age of retirement is set to rise. Photo: Henrik Montgomery/TT

The annual Melbourne Mercer Global Pension Index placed the Swedish pensions system behind the Netherlands, its Scandinavian neighbour Denmark, Australia and Finland.

It was placed in the B category, “a system that has a sound structure, with many good features, but has some areas for improvement that differentiates it from an A-grade system”.

The Netherlands and Denmark were the only countries out of 37 included in the final report that were awarded an A grade, with each receiving scores of over 80.

Sweden's index value meanwhile dropped from 72.5 in 2018 to 72.3 this year, but the report stated this was mainly due to updated UN data and a fall in real economic growth reported by the IMF.

The value was divided into three sub-indices: adequacy (benefits, system design, savings, tax support, home ownership and growth assets), sustainability (pension coverage, total assets, contributions, demography, government debt and economic growth) and integrity (regulation, governance, protection, communication and operating costs). Sweden received a B grade in the former two and an A grade in the latter.

The report suggested the Swedish pensions system could be improved by:

  • Further increasing the state pension age to better reflect increasing life expectancy
  • Ensuring that all employees can make contributions into employer sponsored plans
  • Reintroducing tax incentives for individual contributions
  • Introducing arrangements to protect all the pension interests of both parties in a divorce

The easiest way to understand how the Swedish pension works is breaking it down into three parts. There are three different sources: the state, your employer and yourself.

Overall, the amount you receive will depend on factors such as your salary, your other benefits, how long you work in Sweden, when you start collecting your pension, how your occupational pension scheme is structured, and how much you save in private funds. Read more about how the Swedish pension works here.

EDITOR'S PICKS:

You can choose to start taking your Swedish state pension at any time after the age of 61, or after 62 from next year according to a new parliamentary decision. The so-called guarantee pension for people on a low income is today paid out from the age of 65, although this is also set to rise over the next few years.

You have the right to keep working until the age of 67 (this is also set to rise), but in theory you can keep working and earning towards your pension for many years after this, as long as your employer agrees to it.

Other countries in the B bracket were for example Canada, Chile and Germany, while countries such as the UK, US and France received a C+ grade and for example India, China and Japan received only a D grade.

You can read the Melbourne Mercer Global Pension Index report in full here. The index is a collaboration between the government, industry and academia in the Australian state of Victoria.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

MONEY

How to avoid falling victim to tax scams in Sweden

Sweden's tax agency, Skatteverket, warns of an increase in scams when it's time for Swedish tax-payers to declare their taxes.

How to avoid falling victim to tax scams in Sweden

Anyone who earned more than 22,208 kronor last year received their tax returns digitally last week, marking the start of tax season.

That also means an expected peak in tax-related scams, Skatteverket warns.

Most of the scams are so-called phishing scams, meaning attempts to steal the victims’ personal information. Fraudsters may for example email a person, pretending to represent Skatteverket, and ask them for, among other things, their banking details.

“We’re seeing these in all channels. They use fake emails, SMS, letters and in some cases even phone calls. It is particularly common in tax declaration times – just when we’re about to send out the tax returns, the e-service opens and it’s possible to declare – but above all when it’s time for tax rebates,” Jan Janowski, a Skatteverket expert, told Swedish news agency TT.

A scam email might for example state that you’re entitled to a tax rebate and that you should click a link to receive it. Don’t click any links, open any attachments or reply to the message. Skatteverket advises that you immediately delete the email or text message.

Another common scam is that you receive a text message claiming to be from Skatteverket, telling you that you owe them money and you need to log in to calculate the amount. The website you’re urged to log in via does not belong to Skatteverket. Don’t click the link.

The agency stresses that it never asks people for their banking details. The exception is that you may be asked for your bank account information if you log into Skatteverket’s website to declare your taxes, but that always first requires you to log into the site.

To receive your tax rebate, you need to inform Skatteverket of your bank account number. You do this not by clicking a link in an email or SMS, but by logging into their website using a digital ID, for example BankID, and submitting your details. Only do this on your own initiative. If someone calls you and asks you to log in with your BankID during the phone call, don’t do it. That’s another common scam.

Skatteverket will also never call you to ask for your bank account or credit card number.

It will be possible to declare your taxes from March 19th. You’ll receive any tax rebate you’re owed by mid-April or early June, depending on when you submit your tax return. These are the dates when fraudsters are likely to attempt the most scams.

SHOW COMMENTS