Working Paper & Studies

: Politics and organized interests in Swedish pension policy

Sweden is often hailed as a model for far-reaching pension reform. The comprehensive 1994/1998 reform replaced the existing statutory system that had been in place since 1960 with a new system based on notional defined contributions, individual investment accounts, and a guarantee pension. The reformed pension system also includes "automatic stabilizers" that ensure that pension liabilities and assets remain in balance. Sector-wide occupational pension schemes provide a topup to public pensions. This study analyses the origins, negotiation, and effects of the reformed pension system. It discusses the weaknesses of the preexisting system and the broad political compromise that emerged in the 1990s around reform and continues to shape the direction of policy change. The study also ex-amines the role of occupational pensions in the overall pension system, the role of unions in shaping the reform, and the links between labour market performance and the pension system.