Despite the government calling the decision to introduce a “gas” into the pension system historic, few pensioners will see a noticeable increase in their wallets. An extra hundred kronor per month is far from what PRO demanded – and the disappointment is great.
After years of pressure from the Swedish National Pensioners’ Organisation (PRO), the pension group in the parliament announced the introduction of a mechanism in the pension system. The reform means that pensions can increase when there is a surplus in the system – in contrast to the “brake” that reduces payments when the economy weakens.
But even though PRO welcomes the proposal with the mechanism finally becoming a reality, the organization’s chairperson, Åsa Lindestam, argues that it is far too meagerly designed.
– It is excellent that the mechanism is being implemented in the pension system. It is unfair that pensioners should have their pensions reduced when the pension system’s finances are weak but not receive an increase when the system is economically strong. However, today’s announcement is not enough to realize the significantly higher pension that PRO wants to see, she says.
100 kronor more – when billions go abroad
For those who have 15,000 kronor in pension per month, the increase is expected to be around a hundred kronor – according to the pension group’s own calculations, and many have a lower pension than that, and will therefore receive even less.
Additionally, the mechanism is only activated when the system’s balance reaches 1.15, meaning that the assets exceed the debts by at least 15 percent. If things go well, but not a full 15 percent better, no one will see an extra krona in their wallet.
– It is us, the pensioners of today, who have helped build up the wealth of the pension system, and therefore it is today’s pensioners who should also benefit from the surplus. Setting the bar so high is not reasonable. We might die before any money comes! says Åsa Lindestam.
Critics argue that the difference will be negligible, especially at a time when pensioners are struggling with soaring food prices, increased rents, and rising energy costs. An extra hundred kronor does not come close to compensating for what has been lost in purchasing power.
While politicians are struggling to scrape together a few hundred kronor for pensioners, Sweden has sent nearly 1,000 billion kronor in aid to other countries over the past decades. This has been criticized in light of the fact that parties involved in the agreement have used slogans such as “Sweden first” in their political rhetoric.
“Caution” in politics
However, the government defends the design of the mechanism. Minister for the Elderly and Social Insurance, Anna Tenje (M), describes the reform as a historic step:
– It will mean more money in the wallets of today’s and tomorrow’s pensioners, she says.
She argues that a lower level of payout, i.e., when the mechanism is activated, could have created instability:
– It is a bit cautious and means that there will not be quite as much money in the wallet, but also not the risk of losing the money as quickly.
PRO’s goal: 70 percent of salary
PRO points out that pensions are still far from the level they consider reasonable. The organization’s goal is for a person who has worked a full career to be able to count on at least 70 percent of their final salary in pension – of which the general pension should account for at least 60 percentage points.
In the report Time for a throttle in the pension system! which PRO has produced together with SKPF and the think tank Tiden, it is stated that this requires both a functioning throttle and an increased pension contribution.
– It should be worthwhile to work, and it should be worthwhile to have worked. Pensioners have had some really tough economic years where the income pension has lagged behind when food prices and rents have soared. More is needed for reasonable pensions, says Åsa Lindestam.