Journal Article

The Swedish Experience with Pension Reform

Annika Sundén

in Oxford Review of Economic Policy

Published on behalf of The Oxford Review of Economic Policy Ltd

Volume 22, issue 1, pages 133-148
Published in print January 2006 | ISSN: 0266-903X
Published online January 2006 | e-ISSN: 1460-2121 | DOI: http://dx.doi.org/10.1093/oxrep/grj009
The Swedish Experience with Pension Reform

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  • Economic Development and Growth
  • Public Economics
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Sweden is one of few countries in Europe to have introduced a comprehensive pension reform. In 1998, Sweden passed legislation that transformed its public pension system to a notional defined-contribution (NDC) plan— that is, a defined-contribution plan financed on a pay-as-you-go basis. In addition, a second tier of funded individual accounts was introduced. The reform had broad political support with more than 80 per cent of the votes in parliament. This paper discusses the trends in retirement in Sweden and assesses the experience with pension reform. The objective was to design a fiscally sustainable system tied to economic growth with a clear link between contributions and benefits. We discuss the challenges in meeting this goal, the extent to which the Swedish reform has succeeded, and how the system affects beneficiaries. The paper evaluates the experience of the individual funded accounts to date and concludes with an outlook for the future.

Journal Article.  0 words. 

Subjects: Economic Development and Growth ; Public Economics ; Political Economy ; Public Policy

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