At Work in Stockholm

Pension plans in Stockholm

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The National basic pension is for those born in 1938 or later. It consists of the income/supplementary pension, the premium pension and guarantee pension and is administered by the Swedish Social Insurance Agency and the Premium Pension Authority (PPM).

The pension is based on what your income has been during your working life so if you have worked for a long time and earned a lot, you will receive a higher pension. Similarly, you will receive less pension if your income has been low. 18.5% of your income is paid into the pension system, 16% to the income pension and 2.5% to the premium pension. You also receive pension entitlements for sickness benefit, parental benefit, unemployment benefit, and sickness and activity compensation. You get additional pension entitlements for years when your children were small, when you were studying or doing national service. You can start drawing your pension from the age of 61. The longer you wait and continue to earn pension entitlements, the higher your pension will be. You can also choose to take out full, three-quarters, half or one-quarter pension. As long as you have an income, you will continue to earn pension entitlements, regardless of whether or not you draw your pension.

The old age pension is taxed. In the case of persons born between 1938 and 1953, supplementary pension forms part of the income pension. When you retire the amount of your state pension will partly be determined by the typical life expectancy of your age group, so the older you are, the larger the proportion of income pension you get as a supplementary pension.

2.5 per cent of your pensionable income goes towards your premium pension. For those born between 1938 and 1953 this percentage is less. You may choose to invest your pension capital in any of the various funds registered with the Premium Pension Authority. If you decide not to choose your own investments, the money will be invested in the Premium Saving Fund administered by the 7th Pension Insurance Fund. Married or registered couples can transfer their pension entitlements to each other. On retirement, the pension is calculated basically in the same way as income pension.

If you have had a low or no income during your life, you may be entitled to the guarantee pension. To qualify, you must have been resident in Sweden for at least three years. To qualify for the full guarantee pension, you must have been resident in Sweden for 40 years. An exception may be made in the case of refugees. The guarantee pension is payable from the age of 65.

Those with pension points for only one or two years of residence in Sweden may be credited with insurance periods accumulated elsewhere in the EU/EEA or in countries with which Sweden has a convention. The size of the supplementary pension you get depends on how many years you have worked and how much you have earned each year.

You may be able to get a widow’s pension and guarantee pension if your spouse has died.

Children under the age of 18 are entitled to child pension on the death of one or both of their parents. Child pension is also payable to children over 18 provided they are studying at compulsory school, upper secondary school or a similar establishment. If you have given up work for at least six years in order to care for a sick or disabled child you may be able to get a special pension supplement.

You can read more about pensions on the website of the Swedish Social Insurance Agency:

Update 15/05/2008


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