The orange pensions envelope explained - part two

Every newcomer who contributed to the Swedish public pension receives an annual statement from the Swedish Pensions Agency; it is called the orange envelope. Here, in the second of two articles, personal finance expert, Jiten Chavda, helps us explain what each page means.

Pension & välfärdspolitik 23 februari 2023 11:04

The Swedish public pension system is split into two sections.

Explain to us what the first section is.

– Every year 16% of your pensionable income and other taxable benefits are allocated to your income pension. You have no control over where the money is invested, says Jiten, who advises international people in Sweden about their pensions.

– The income pension is a complement to the National Public Pension. The income complement can be paid if you live in Sweden or within the EU/EAA or Switzerland (EEA is the EU countries including Norway, Iceland and Lichtenstein). 

And how about the second part of the pension?

– This is the premium pension. Every year 2.5% of your pensionable income and Öhrn taxable benefits are allocated to your premium pension. Here, you can choose which funds your pension is invested in and this will have an impact on how much you will receive at retirement. If you do not make a selection, then the funds will be invested in the default fund AP7 Såfa.

The contents of the orange envelope can be confusing for newcomers to northern Sweden.

What do all the pages mean?

– On page 1 you can see the pension triangle. The base section indicates the public pension. Below the triangle there are 3 boxes which show how much you have earned for your retirement this year, how much you have saved and how much money you are expected to receive at retirement.

– On page 2 you can see how much you have earned in the public pension over the last year. These figures will be based on your declared income in 2021.The income-based part consists of 2 parts: income and premium pension.

– On page 3 you can see how your pension has grown over the year. You have no control over the Income part; however you have control of the Premium part. 

– On page 4 you can see how the premium part is doing and what funds it is invested in. If you don't exercise control here, the funds will be invested in the default fund.

– On page 5 you get an idea of how much pension you can expect to receive if you delay your retirement. 

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