Published today 10:32
The pension system. Pension balancing changed from 2017. Only a third of the balancing effect will affect pensions. The purpose is to smooth out the fluctuations between years without adding more money to the pension system, writes Pension Group which consists of representatives of the parties behind the pension agreement.
The pension system balancing changed from 2017. Only a third of the balancing effect will affect pensions. The purpose is to smooth out the fluctuations between years without adding more money to the pension system, writes Pension Group which consists of representatives of the parties behind the pension agreement.
In 2016 become a historic year. According to the latest forecast from the Pension Agency expected income pension increase by 4.7 percent. Combined with the almost non-existent inflation means that the highest real increase in pensions since the new pension scheme was introduced. The increase is the result of an improved economic situation in Sweden, while balancing the pension system – the so-called brake and gas – to compensate for earlier losses.
Pension Group has decided that the pension balance will be changed from the year 2017. This means that the entire increase in 2016 will be pensioners to part, and that the level of pensions in future will develop smoothly.
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It should be so. Pensioners have been involved and borne the burden of the recent economic downturn, and they deserve both higher and more sustainable pensions. Since 2010, balancing struck on several occasions. Income pension has evolved erratically with sharp ups and downs from year to year during the period. It has led to pensioners economy has been uncertain and difficult to plan.
Balancing exists to secure long-term nature in the pension system. It is based on complex calculations, but based on a simple principle: that the pension should not pay out more money than it receives. In bad times, it means that pension payments reduced, instead of borrowing money from future pensioners. In good times, pension grows stronger to compensate for earlier reductions. That way, we leave behind us a well functioning pension systems also to our children and grandchildren. It is part of such a rise that contributes to the large increase next year.
As in any system, it was initially difficult to completely predict how and when balancing would come to beat. In recent years it has become clear that balancing certainly works but that its exact method entails that the pension developments in certain cases, unnecessary throw. Increases that compensated for balancing an earlier has led to a new reduction in the second year. An overly wobbly development of pensions will lead to unnecessary uncertainty about their future pension.
This is the background to why the Pension Group has now decided to alter the balance of their format. A strategic decision that was made just over a year ago. Since then, the Government Offices prepared details and analyzed the timing of the introduction. The newly proposed change involves balancing from the year 2017 will be softer – only a third of the balancing effect affecting pensions. In this way we flatten out the fluctuations in payments from year to year. Both brake and the gas becomes less abrupt.
It is important to be honest with that purpose with this particular change is not the income pension will be added more money. This adjustment does not give or we take money from the pension scheme, but only smoothes out the fluctuations from year to year. We bolts of the brake and accelerator pedals, but does not add the vehicle more fuel.
Having said this looks pension group that there are good reasons to strengthen the income pension. We know that there are pensioners, especially single women, living with key finance and has been difficult to get the economy going together. As a rising life expectancy, future pensions will be lower if we do not increase revenues to the pension system.
But there are no shortcuts to more generous pensions. Revenues from work. We get higher pensions through an earlier entry into the labor market and by enabling people to work longer into old age. By reducing unemployment. By having smooth roads into the Swedish labor market for people who immigrate to Sweden. The more people that contribute to the Swedish labor market, the higher pensions.
It is also particularly important to improve the situation for female pensioners. Today women are taking greater responsibility for children and households, working in increasingly part time and have higher sickness absence. This leaves the clear impression in pensions envelope. To address the situation started pension group recently a subproject for equal pensions. By different ways to access the roots and symptoms of inequality among pensioners, the pension system and pensioners’ situation to improve.
These are actions that require a long-term perspective and a holistic approach. Both in terms of the discussion on gender equality and a longer working life, we need help from other players in society – not least the social partners. They have the best knowledge of conditions in workplaces. There are also those who negotiate collective agreements, which have a major impact on these issues.
In the shorter term, the adjusted balancing , one of the more changes that lie ahead. In the discussion about the timing of its introduction has many good comments were received. Some commentators – including retiree organizations – opposes the proposed change, citing that they would rather see that we are making steps to strengthen the income pension. A clear majority is in favor of the proposal as such. Some of the bodies consulted behind the change believe that we should wait an introduction to respond to the current balancing period, ie, after the recent slowdown have abated while others believe that it is important that it is introduced as soon as possible
These comments have been valuable for the pension group in our position. We want pensioners to share in the expected recovery. At the same time, it is impossible to predict when the economy turns around next time, as well as ongoing balancing period will completely be finished. The faster the change is introduced, the better the pension system equipped for the next downturn.
After carefully balanced these factors, the pension group concluded that the year 2017 is the most appropriate time to introduce the altered balancing. It is important to note that pensions will continue to develop positively, as long as the economic situation continues to be good.
2016 will be a good year for Sweden’s pensioners. The community has an interest in the pension system is as robust as possible. By introducing the altered balancing in 2017 strengthens the economy for today’s pensioners, while building robust pension for their children and grandchildren.
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