スウェーデンに学ぶ政治家主導の年金改革

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1 Proceedings No.3 Konberg Hitotsubashi Winter Workshop on Pensions INSTITUTE OF ECONOMIC RESEARCH HITOTSUBASHI UNIVERSITY

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3 Bo Könberg Bo Könberg ii

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32 Hitotsubashi Winter Workshop on Pensions 29 Some Lessons from the Swedish Pension Reform by Bo KÖnberg, MP Tokyo, January 2002 Swedish Pension Reform

33 30 Short History Working Group on Pensions Dec - 91 Draft Aug - 92 Five-party Agreement Jan - 94 Parliament Decision June - 94 Tokyo, January 2002 Swedish Pension Reform

34 31 Some Lessons from the Working Group a very clear direction high-level participants great intellectual openness a limited number of people in the room no one in the room just watching the negotiators Tokyo, January 2002 Swedish Pension Reform

35 Contribution Years per Retirement Year 32 Tokyo, January 2002 Swedish Pension Reform

36 Social Insurance Expenditure GDP 33 Payments as a percentage of GDP (incl. prognosis ) December 2001/RL/IW/LL Tokyo, January 2002 Swedish Pension Reform

37 Contribution Rates : Swedish Mandatory Public and Contractual Benefits %- Contractual Benefit 2.5% - Funded 22 % 16% - NDC PAYG-component Social Insurance 18.5 % ( ) Tokyo, January 2002 Swedish Pension Reform

38 35 Directions of the Reform Contribution 16 % Contribution 2.5 % (of pensionable income) Link between contributions and benefit 100 % 100 % 0 % New PAYG system I Old PAYG system III Financial accounts system II IV 0 % 100% Degree of funding Tokyo, January 2002 Swedish Pension Reform

39 Every contribution during the whole life career gives 36 corresponding account value SEK Pensionable income 16 % Pay-as-you-go Funded 2,5 % Tokyo, January 2002 Age Swedish Pension Reform

40 Sickness unemployment parental benefits, etc. Types of Pensionable Income 11% Disability benefits 4% 2% Child years 37 83% Wages & income of self-employed Tokyo, January 2002 Swedish Pension Reform

41 16000 SEK Accrual of (notional) account & pension Life expectancy 38 Value of indexation Real rate 1,6% Value of contributions divisor Age Tokyo, January 2002 Swedish Pension Reform

42 ( ) Pension as an Annuity 1 1.6% The imputed rate =1.6% ( ) Age Tokyo, January 2002 Swedish Pension Reform

43 Contributions and Benefits in the New and the Old Systems ( ) 40 Contributions Benefits National basic Reformed rules pension and ATP SEK SEK SEK % % of final salary of final salary SEK SEK SEK % % 10.5 of final wage of final wage Tokyo, January 2002 Swedish Pension Reform

44 Guarantee pensions 41 Basic security for those with low or no income-related pension Income related + guarantee Guarantee Income-related pension Income-related pension Tokyo, January 2002 Swedish Pension Reform

45 Guarantee pensions 42 Basic security for those with low or no income-related pension lowest guarantee level 2.13 base amounts for single people 1.90 base amounts for married people made up to the income-related pension from the age of 65 for full guarantee pension a person must have lived Sweden for 40 years same taxation rules as for the gainfullemployed Tokyo, January 2002 Swedish Pension Reform

46 The Swedish pension reform defines a financially stable pension system 43 Contribution = Entitlement Average wage indexation Annuity = Capital / (Life expectancy & Real rate 1.6%) Balance mechanism Tokyo, January 2002 Swedish Pension Reform

47 Reasons for balance mechanism 44 Transition period Transition period Decline in labour force Decline in labour force Annuity is is calculated on on life life expectancy at at the the time time of of retirement (people will will probably live live longer) Rate of return on the buffer fund Rate of return on the buffer fund Tokyo, January 2002 Swedish Pension Reform

48 45 Fund + Contributions Asset Balance ratio = Pension Liabilities Tokyo, January 2002 Swedish Pension Reform

49 Time and money Contributions Payments age In average: 43 years age 76 years age ( ) ( ) Contributions Wait 33 years Payments = () age () Tokyo, January 2002 Swedish Pension Reform

50 The Balance Sheet in 2003 ( ) Fund 550 mdr. SEK Contributions Asset Fund mdr. SEK SEK Pension Liabilities mdr. SEK Balance Ratio = Tokyo, January 2002 Swedish Pension Reform

51 Automatic balance mechanism, some properties ( ) 48 Secure financial stability regardless magnitude or type of financial strain Allow less stable ( more socially attractive ) systems deviation from desired indexation only if it is financially necessary No forecasts, nevertheless early reaction to protect liquidity bookkeeping based on well defined, observable historical facts, increases transparency Tokyo, January 2002 Swedish Pension Reform

52 Income and balance index Income index Balance index faster indexation slower indexation Tokyo, January 2002 Year Swedish Pension Reform

53 1,50 Balance ratio, Demography = Baseline, growth = 2% ( ) 50 1,40 1,30 1,20 1,10 5.0% 3.25% Rate of return 5.0% 3.25% 2% 1,00 0,90 2.0% %, with balancing Tokyo, January 2002 Swedish Pension Reform

54 Buffer Fund Ratio Demography = Baseline, growth = 2% 51 ( ) 10,0 Buffer Fund Ratio [years] 5.0% 8,0 Rate of return 6,0 4,0 3.25% 5.0% 3.25% 2% 2,0 0, ,0 2.0% 2.0%, with balancing -4,0 2.00% med 2.00% utan 3.25% med 5.00% med Tokyo, January 2002 Swedish Pension Reform

55 Buffer Fund Ratio Nativity = Low, growth = 2 % 52 ( ) 10,0 Buffer Fund Ratio [years] 8,0 6,0 4,0 2,0 0, ,0-4,0 5.0% 3.25% 2.0% Rate of return 5.0% 3.25% 2% 3.25%, with balancing 2.0%, with balancing 2.00% med 2.00% utan 3.25% med 3.25% utan 5.00% med Tokyo, January 2002 Swedish Pension Reform

56 If a Pay-As-You-Go system is based on Then it is an life income adjusted for changes in contributions adjusted for changes in life expectancy Unfunded Defined Contribution system, which can be named a Notional Defined Contribution system (NDC) 53 Tokyo, January 2002 Swedish Pension Reform

57 Civics 54

58 Bo Könberg (fp) Stockholms City Council, seat 10 Address: Riksdagen, S Stockholm, Sweden Phone: bo.konberg@riksdagen.se Homepage Parliamentary missions: Deputy member of Committee on Finance Member of Committee on Social Insurance Deputy member of Advisory Committee on EU Affairs Member of the War Delegation Member of the Riksdag Board Deputy member of Advisory Council on Foreign Affairs Deputy member of Nominations Committee Title: Former County Council Commissioner Born: 1945 More information is available in Debatt & beslut/rixlex. 55

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