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.


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.

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Reader question: What is Switzerland’s Reka payment system and how do I use it?

The Swiss franc is Switzerland’s official currency and that is not about to change. But the country also has an alternative 'currency'. And no, it is not Bitcoin either.

Reader question: What is Switzerland’s Reka payment system and how do I use it?

Even if you have been living in Switzerland for a while, you may not have heard of Reka, a “currency” — or more like vouchers — used for holidays, leisure activities, transport, meals, as well as for other purchases.

This is what you should know about it:

This voucher system is maintained by the Swiss Travel Fund (Reka) cooperative. Each voucher (or unit, as it is called in the Reka-land) is worth one franc. Reka checks are banknote-like vouchers issued in denominations of 10 and 50 francs — in other words, worth the equivalent of 10 or 50 francs, respectively. 

However, you will get more bank for each franc, as explained below.

You can keep these vouchers in a Reka account and spend your money with a Reka card — neither the account nor the card has anything in common with traditional banks or credit cards, though they work in a similar way. 

You can access your account via the web portal or by phone and SMS.

How do you open a Reka account in the first place?

There are two simple ways to do this, according to Reka.

One, you first register online and then open an account in the customer portal.

All the information on how to activate your account is there. You will receive a 2-percent discount every time you load your account. Once you have added credit to it for the first time, you will receive the Reka card by post— it works like a regular debit / Bancomat card.

You can also obtain a Reka-Card by showing your Supercard at the customer service in selected Coop sales points (Coop supermarkets, Jumbo and Coop City), where you load it with the desired credit amount.

According to Moneyland consumer portal, “some industry associations and labour unions offer discounted Reka checks as a member benefit. It is also possible to find discounted Reka checks being sold by private individuals on classified sites”.

Additionally, some employers give employees Reka as a bonuses.

“Those worth up to 500 francs do not have to be declared as income,” says consumer experts at Moneyland.

What are some of Reka’s advantages?

The main one is that you will receive a discount every time you shop with the Reka card or vouchers, and can save up to 20 percent on purchases.

Where can you use Reka?

More than 8,500 retail points accept Reka payments.

To make it easier, they are split into three categories:

Reka-Pay, which you can use to pay at Avia, BP, and Coop Pronto service stations, public transport, hotels and camping sites, fitness facilities, and ski schools.

Reka-Lunch, to pay at restaurants, cafés, bakeries, as well as Selecta and Lavazza vending machines.

Reka-Rail. As the name suggests, this can be used for Half-Fare Travelcard, GA Travelcard, tickets for the entire public transport network, and ski lifts and mountain railways.

Are there any disadvantages for this system?

There are a few drawbacks according to experts.

The main one is that Reka money is only accepted in Switzerland and only by a limited number of merchants — about 8,500.

Also, “Reka will not exchange Reka money back into francs, so getting Reka money only makes sense if you already make purchases from Reka partners (if you use public transportation, for example),” says Moneyland. 
You can find out more information about how Reka works and what it offers on this site.

READ MORE: EXPLAINED: 8 ways to save money on your groceries in Switzerland