Session: 19

Social Security

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Summary

The former Swedish pensions system was established in 1960. It consisted of two parts - the National Basic Pension and the National Supplementary Pension. Guidelines for a pension reform were adopted by the Swedish parliament in the summer of 1994, and in June 1998 the majority of legislation constituting the reform was passed by the parliament. The decision was to replace the current defined benefit system with a defined contribution system consisting of two main types of pension: the Income Pension and the Premium Pension. The Income Pension comes under a pay-as-you-go system, while the Premium Pension is a scheme where contributions are invested in funds chosen by the insured (the pension saver), i.e. a premium reserve system (funded system).

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