The Swedish income pension system's surplus increased by SEK 100bn in 2022 to SEK 1.3trn, as at 31 December 2022, according to the Swedish Pensions Agency (SPA).

In the base scenario, the surplus is expected to continue to increase due to a growing population and increased retirement ages leading to more people being employed at older ages.

The surplus is forecast to be further strengthened when the ‘target age’ is introduced in 2026.

Although the retirement age was raised recently following a decision in the Riksdag, the decision to introduce the target age was already in place.

The target age will be introduced in the general pension system and aims for the retirement ages to follow the development of average life expectancy.

It sets the earliest point that Swedes can draw on their general pension or receive a guaranteed pension, income pension supplement and housing supplement.

When retirement ages are increased, contribution assets in the general pension system tend to improve, the SPA noted.

The SPA’s report highlighted how different developments can affect the public pension system’s financial position and the size of the pensions, and presents projections of the pension system’s development.

Commenting on the report’s findings, SPA analyst, Erik Granseth, said: “Even when we count on a pessimistic scenario, the assets exceed the liabilities during the entire projection period of 75 years, this is because the retirement ages are raised in line with the increasing life expectancy.”

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