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The Swedish pension system - how it works

The Swedish pension system consists of three parts - a national public pension, an occupational pension from your employer and savings of your own.

The national public pension from the state is at the bottom. For most people an occupational pension from their employer makes up the next layer. Any private pension savings people may choose to make go at the very top. This shows that your pension comes from different sources. You may choose where to invest your pension savings yourself for certain parts, but not for others.

National public pension from the state

If you work and pay tax in Sweden, money is allocated to your national public pension. This is paid for by your employer through employer contributions, and you also pay some via your taxes. The highest pensionable income is SEK 47,625 per month which is equivalent to 7.5 income base amounts.

Base amounts, like income base amount and price base amount, are used for a range of calculations, for example for pensions or insurance. The amount reflects price and income trends in Sweden and is set every year.

National public pension includes:

  • Income pension – 16% of your salary is allocated to the income pension every year. This money goes to the people who are retired today. Your income pension will in turn be paid for by those who are working and earning money when you are retired.
  • Premium pension – 2.5% of your salary is allocated to the premium pension every year. This money goes towards your own future pension. You can choose where to invest this money yourself. This is done through Pensionsmyndigheten, the Swedish Pensions Agency.
  • Guarantee pension – if you have had little or no income during your life, you may receive a guarantee pension. This is based on various things including how much income pension you are entitled to and how long you have lived in Sweden.

You will continue to accrue national public pension while you are studying or on parental leave.

Occupational pension – the pension from your employer

Your occupational pension supplements the public pension. If you work for a company that has a collective agreement, an occupational pension is included automatically. But even if your workplace doesn't have a collective agreement, you may still be entitled to an occupational pension, provided that your employer has taken out another occupational pension solution.

If you have worked in areas other than the private sector, such as for the government or a municipality, you may also receive an occupational pension from that employment. Your occupational pension makes up an important part of your total pension.

Learn more what applies to you:

Private pension savings – money you save yourself

Anyone who wishes to can also save money themselves towards their pension. It is up to you to decide whether you would like to contribute to your own pension savings.

Organisations in the pension sector

Avtalat is there for almost three million employers and employees with collective agreements in the private sector. By offering combined information and guidance, avtalat.se covers all aspects relating to collectively agreed occupational pension and insurance.

But Avtalat is not the only organisation in the pensions sector. Here are some of the others:

  • Pensionsmyndigheten, the Swedish Pensions Agency, manages and pays the national public pension from the state.
  • Försäkringskassan, the Social Insurance Agency, decides on and pays benefits that are included in Swedish social security (such as parental benefit and sickness benefit).
  • Fora if you work as a blue collar worker at a private company that has a collective agreement, the occupational pension is called Avtalspension SAF-LO, and the selection centre is Fora.
  • Afa Försäkring handles and pays out the collectively agreed insurance policies that supplement the statutory insurance policies in the event of illness, work-related injury, shortage of work and death.
  • Minpension.se is an independent and free website (in Swedish) for everyone who accrues a pension in Sweden. It is based on a collaboration between the Swedish state and the pension companies.
  • Alecta manages and pays the ITP 2, which is the usual ITP occupational pension for people born in or before 1978 (though some companies have chosen the ITP 1 for all employees, irrespective of age).

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