Swedish pension company Alecta will increase defined benefit (DB) pensions by 0.89 per cent for 2026, matching the inflation rate over the past year in Sweden.

This decision, made by Alecta’s Board of Directors, will see 1.5 million pension customers covered by the DB ITP 2 receive a share of the SEK 5bn allocated to cover the costs.

The increase applies both to occupational pensions currently in the payout phase and to accrued pensions that have not yet begun to be paid. Broken down, it will benefit 571,000 ITP pensioners with pensions in payment and 916,000 customers who are still accruing pensions.

Alecta pension economist, Staffan Ström, said: “Recently, the inflation rate has fallen back after several years of very rapid cost increases. Over the past year, inflation measured by the consumer price index (CPI) has been 0.89 per cent, and therefore, the adjustment of DB pensions at the turn of the year will land at the same level.

“Looking at a slightly longer period, the adjustments to DB pensions have been substantial; over the past four years, Alecta has allocated SEK 100bn in pension increases to around 1.5 million customers. Ensuring that the purchasing power of occupational pensions is maintained both in good and challenging times provides great security for our customers.”

Alecta has increased pension payments in line with inflation every year since the introduction of the ITP plan in 1960. The inflation figure Alecta bases its adjustments on is Statistics Sweden’s (SCB) annual CPI change as of the end of September each year.

In addition, the pension company has announced that in 2026, 37,000 corporate customers will benefit from premium reductions as it is reducing the premiums for the DB ITP 2 Retirement Pension and ITP 2 Family Pension by 35 per cent. It will also continue to with premium reductions for risk insurance.

In total, the reductions in risk and savings premiums, together with the adjustment of accrued pensions for private customers with defined benefit ITP 2, amount to SEK 9.4bn.

Alecta head of product, Fredrik Palm, said: “Alecta’s corporate customers should never pay more than what is needed to fulfil their pension commitments to their employees. Reduced premiums are one way to ensure this.

“Premiums have been reduced every year for the past five years, and the fact that the premium reduction for ITP 2 Retirement Pension and Family Pension is now being expanded from 25 to 35 per cent provides a further decrease in companies’ pension costs.”

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