Thousands of Swedes retire every year. Instead of receiving a salary every month, it is replaced with a pension payment instead. The public pension is flexible as you can choose to both pause or divide the payment.
It is different with the occupational pension, which requires you to choose a start time for when it will begin to be paid out and for how many years the payment will take place.
Once you have made these choices, you cannot change your mind, then the choices you made simply apply. However, this may soon change.
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This is what the occupational pension can look like
The government has presented a bill on a change in the law to make the occupational pension more flexible for future pensioners.
Dan Adolphson Björck works as a pension economist at minPension. In an interview with News24 he explains when and how an upcoming law change will look like.
– As the rules look today, you can pause the withdrawal of a general pension, but it is not possible to stop ongoing payments of an occupational pension. The amendment to the law makes it possible to pause the occupational pension, survivor’s pension and private pension during the first five payment years and to extend the payment period.
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This is how you benefit from the new occupational pension
According to Adolphson Björck, there are several things that will benefit you when the expected law change comes into effect on January 1, 2025.
– The occupational pension is usually paid out automatically when you reach the agreed retirement age of 65, 66, 70 or 72 depending on the agreement, unless you choose something else. The payouts sometimes arrive before you reflect on what it means. It is easy to be a hindsight, but once the payments of the occupational pension have started, it is not possible to pause.
He also explains that those who might want to go back to work may have problems when taxes increase when you have both pension and work income.
– So there is a risk that you shy away from working even though you really want to. The politicians do not want to put a hook on the job bonuses and of course hope that labor force participation among the elderly will continue to increase. Both individuals and society at large benefit from this change, he tells Nyheter24.
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Dan Adolphson Björck is a pension economist at minPension. Photo: Press image minPension/Urban Jörén The disadvantage of the new occupational pension
At the same time that many people may benefit from the change in the law in occupational pensions, there are at the same time a lot that can be seen as losers where a clear disadvantage may follow.
– This improvement is mainly for those who will soon start their pension withdrawal and not for those who are already retired. If you have an ongoing pension payment for more than four years, you are not covered by this change in the law. Nor is the legislation mandatory, he says, adding:
– The collective agreement parties, employers and trade unions, and also the pension companies will determine what is possible in practice. It will therefore look different when and if this is introduced. With a high probability, there will be differences both between pension companies and occupational pension agreements. Some parts of the occupational pension can already be covered from 2025, others only in 2026 or later.
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