9
Summary
The Swedish Social Insurance Inspectorate (Inspektionen för
socialförsäkringen, ISF) is an independent supervisory agency for the
Swedish social insurance system. Its objectives are to strengthen
compliance with legislation and other statutes, and to improve the
efficiency of the social insurance system through system supervision
and efficiency analysis and evaluation.
ISF’s work is mainly conducted on a project basis and is
commissioned by the Government or initiated by the Agency. This
report has been initiated by the Agency. Parts of the material have
been published in a Swedish Government Official report (SOU
2012:28).
This report highlights the institutional effects of the occupational
pension benefits and employers’ costs for older employees.
Older people's wage costs are often cited as an important factor that
acts to the detriment of the demand for older employees. A number of
reforms have been implemented recently in Sweden that is expected
to increase the economic drivers for both the individual and the
employer to continue in employment after the age of 65. However,
there may be strong incentives to leave employment before the age of
65. Through their occupational pensions, large groups have the ability
to take early retirement, either fully or in part. The employer also has
possibilities to offer an early retirement pension to older employees
before they are 65.
Calculations for various scenarios reveal that total wage costs can be
significantly more for older employees compared to those for younger
employees. The explanation for this is that the premium costs of the
occupational pension benefits – under certain conditions – are higher
for older employees and those with relatively high work income. The
calculations also show that, with fewer years remaining until the
normal retirement age (currently 65 years), salary increases have a
