News24 have spoken to the pension expert Monica Zettervall, at the Pensions Authority. She is passionate about women’s and men’s pensions. Therefore, it feels sad that many people shoot themselves in the foot by over-insuring themselves, and thus reduce their own pension.
– You who have signed repayment protection will receive a lower future pension, in some cases completely unnecessarily, says Monica Zettervall to Nyheter24.
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This is how repayment protection works on the pension
It’s all a bit complicated. But simplified, you can say that repayment protection is a way to make sure that the occupational pension money that you have earned goes to your own family if you die prematurely.
It may sound wise, and many people who get repayment protection do so because there may be a need there and then. Others have it built into the occupational pension and must actively opt out if they do not need it.
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Monica Zettervall: A bad deal
– Most women I meet take out all the protection they can. This is especially true after having children. But it can be a bad deal in the end, says Monica Zettervall.
If you choose no repayment protection, your pension will be higher. This is because you get to share money from other savers who died and did not have repayment protection.
If you choose repayment protection, your pension will instead be lower. This is because you are not allowed to share money from other savers who have died.
Reduced pension completely unnecessarily
Some who have repayment protection also do not have a survivor who can receive the money in the event of death. Then they have insured themselves and reduced their pension completely unnecessarily.
– If you are single with no children, if you live with someone who has a higher salary than you or if you have adult children who can support themselves financially, it is often unnecessary to have repayment protection, says Monica Zettervall.
For most people, the occupational pension corresponds to approximately 25 percent of the total pension compensation each month. By not over-insuring, that amount can increase significantly.
Men die earlier
In addition, there is another equality issue: Men live shorter lives on average than women. This means that the most likely scenario in a bisexual relationship between a man and a woman is that the man passes away first, while the woman lives on, rather than the other way around.
– If someone in a heterosexual relationship should have this insurance, it is most likely the man, who also probably earns more than the woman if you have to generalize, says Monica Zettervall.
Meager pension becomes even more meager
In addition, there are additional unnecessary expenses: In some cases, it is possible to take out extra financial protection for survivors via the occupational pension, a so-called family protection, in which case a fee is taken from your occupational pension. Your future pension payments will then be even leaner, for an insurance that is in some cases unnecessary.
So it’s never something to have?
– There are certainly situations when your family needs your occupational pension money if you die. The best tip is to sit down at the dinner table and go through how the finances look in the household, what insurances you have and whether someone should have repayment protection or not. Think about what happens if one in a relationship dies, will the other cope financially?
And it’s better to have that conversation with your significant other ASAP.
Then it’s too late
– The suggestion is to have the conversation in good time before one of the parties dies. Then it becomes difficult, says Monica Zettervall.
To see where you have your occupational pensions, log in to minimum pensionthen you can log in to or contact the respective occupational pension company to see if there is repayment protection or not.
And you may need to contact them individually to become wiser. For some, there may be several pension companies to contact.
– Most Swedes who retire receive payments from an average of eight different pension payers, concludes Monica Zettervall.
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