More flexible rules for withdrawals from pension insurance and pension savings accounts
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
S wants it to be possible to pause occupational pension payments to facilitate a return to work and give retirees greater freedom to plan their withdrawals 1. S believes it is positive that individuals get the opportunity to work in their later years and wants aging to be dignified regardless of work capacity 1. SD believes that the current rules are rigid and that the possibility to pause payments is a welcome change that benefits both individuals and society 2. SD argues that the change gives retirees control over their economic decisions and makes it easier for employers to recruit experienced labor 2. M believes that the proposal is good because it makes it possible to adapt retirement to personal needs and avoid economic setbacks when returning to work. M argues that it is a win-win situation for the individual, the employer, and society as it makes it easier for retirees to work without being affected by unnecessarily high taxes.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Kalle Olsson (S)
Mr. Speaker! Initially, I would like to express my approval of the proposals in the report Flexible rules for payments from pension insurance and pension savings accounts.
We want it to be possible to pause the payments of occupational pensions, for example in cases where one wants to return to working life. It could reduce the need for pension, at least for some. We also want it to be possible to change the payment period. In this way, the country's pensioners will have greater freedom to plan the withdrawal of their pension themselves.
Today, special requirements apply to ensure that pension savings, which have certain tax advantages, actually go towards retirement and do not become a disguised ordinary investment. One such requirement is the so-called five-year rule, which means that the capital in a pension insurance may not be paid out for a period shorter than exactly five years and must be paid out in the same or increasing amounts. With the proposed amendments, it is clarified that the five-year rule does not prevent a suspension of the payments. Exceptions are introduced from the requirement of payment in the same or increasing amounts when an extension of the payment period occurs.
From a socio-economic perspective, it is good that individuals who want and are able to work can be given the opportunity to do so even in the autumn of their lives. It is also welcome in light of the fact that the occupational pension has become an increasingly important part of the total pension. We have also seen a trend where more and more people choose to take out their occupational pension over a shorter period. We have, in turn, also seen some signs that some have in hindsight regretted the choices they made.
It is positive that the Riksdag, in broad agreement, is in accord that we shall not disadvantage or make it more difficult for those who wish to return to work later in life. On the other hand, Mr. Speaker, one could wish that there were the same fine parliamentary alignment in the question of how we respond to all those elderly people who cannot manage to return to working life, for example, the care assistants who have worn out their backs in elderly care, the floor layers who have ruined their knees, and the childcare workers who have ruined their shoulders after hauling around our children. It is desired, Mr. Speaker, that we could agree on somewhat more flexible rules also for these groups.
The regulatory framework should be more permissive, but that is probably hoping for too much. Here, it is rather about trying to protect the progress made during the S-led government's time. This concerns, for example, the security pension, which is an opportunity for older people at the end of their working lives to receive sickness compensation and in that way avoid being pushed out of the workforce and into poverty. We shall see if that reform survives the mandate period or if it is sacrificed on the so-called work line's altar.
Mr. Speaker! There must in any case be no doubt that we Social Democrats want aging to be dignified and filled with opportunities, regardless of whether one has more to give in working life or not.
Eric Westroth (SD)
Mr. Speaker! Today we are debating the Committee on Taxation's report SkU4 on more flexible rules for withdrawals from pension insurance and pension savings accounts. The Government's proposal to enable pauses in pension payments from these systems is a welcome change, which is demonstrated, among other things, by the fact that all parties in the Pension Group have expressed their support for this. One must be cautious and not exaggerate the effects of the proposal, but there are good reasons to believe that it will yield positive results both for individual individuals and for society as a whole.
As it stands now, the rules of the pension system regarding payments are quite rigid. If a retiree has started the payments from their pension insurance or their pension savings account, they are forced to continue these payments with equal or larger amounts for at least five years. This has created obstacles for those who, after having started their pension, have wished to return to working life. Although there have been no formal obstacles for retirees to take a job, Sweden's progressive tax system has made it economically disadvantageous for many. When salary and pension have been taxed together, the net income for the gainful employment that many retirees could perform has, for large parts, been eaten up by taxes. This situation has in many ways been unfortunate, not least since especially younger retirees have both the will and the ability to continue working. It is often about people who have built up great competence during their professional years and who still have much to contribute. At the same time, the labor market often has a need for precisely the competence these individuals possess, not least within healthcare, education, and technology fields, where we see a shortage of experienced labor.
It is not only for the sake of the pensioners that this change is welcome, but also for the entire society, which needs to take advantage of all the resources and knowledge that are available.
Mr. Speaker! With the proposed rules, pensioners will have greater flexibility to decide for themselves how and when they want to combine pension and work. They can pause the payment of their pension during periods when they choose to return to gainful employment and will also be able to extend the payment period after it has commenced.
Employers who have a need for experienced labor during temporary or specific periods will hopefully be able to recruit retirees more easily without having to take into account tax effects to the same extent. This creates better conditions for both employers and employees to meet in a way that is advantageous for both parties.
One should also not underestimate the psychological aspect of this change. Many who retire early may experience that they still have much to give, and the opportunity to continue working on their own terms can be a way to stay engaged, active, motivated, and not least, healthy.
Mr. Speaker! This change will not solve all the challenges that exist in the labor market. Nor will it mean that all retirees choose to return to work - or that they can even do so. But it still offers an important option. It is about giving people more control over their own economic and professional decisions and creating conditions for a more flexible working life for those who wish to return to work after starting their pension. In this way, one not only strengthens their own economic situation but also our common welfare.
Crister Carlsson (M)
Mr. Speaker! I move for approval of the proposals in the Committee on Taxation's report SkU4.
People who return to work after retirement can today pause the general state pension. On the other hand, it is not possible to pause the collective agreement occupational pension paid in by the employer. This leads to the fact that many retirees who return to work without keeping track of the taxes risk a significant financial setback when they file their tax return.
Mr. Speaker! The new proposals mean, among other things, that during the first five years of payment, it will be possible to pause a commenced payment of old-age pension and survivor's pension from a pension insurance. It will also be possible to extend the payment period after it has been commenced. Corresponding changes are also proposed for payments from various pension savings accounts. The purpose of the proposed changes is to make it possible to better adapt retirement to what suits oneself.
This represents a good opportunity, Mr. Speaker, for those who regret having retired once. Perhaps one thinks that retirement life is rather boring or wants to strengthen their finances, or both. There are then advantages to starting to work again - if one has the energy, of course. One meets people. Loneliness is, as is known, a rather large problem in society, and especially among the elderly. One contributes with one's experience, one reduces the skills shortage, and employers get greater access to experienced employees who can contribute with their competence even after retirement.
We must use the resources and competence that exist among the elderly when we have a competence shortage in Sweden, and this without economic setbacks affecting the individual. The proposal is therefore very good, and it benefits both pensioners and society as a whole.
Being able to pause pension payments entails several tax advantages for those who enter and leave work. If you, for example, choose to work part-time or take a temporary job during your retirement, you can pause your pension payments and thus avoid unnecessarily high taxes on your income, as pension payments are added on top of the salary. It must always be profitable to work, and with this reform, it becomes a win-win situation for the individual, the employer, and society.
Mr. Speaker! It is not more than reasonable, I think, that Sweden's pensioners should be able to choose for themselves how they want to structure their pension after a long working life, and it is actually strange that this proposal has not come earlier given that everyone seems to think it is a good proposal. The issue has also been raised for a long time. According to information, 12 percent of those who are 70-75 years old and who have a occupational pension have stated that they are dissatisfied with the payment period they have chosen. This group will therefore, hopefully, benefit from the change in the law.
The new provisions are proposed to enter into force on 1 January 2025. This is yet another good proposal from the government and yet another issue where the Tidö cooperation delivers.
More flexible rules for withdrawals from pension insurance and pension savings accounts
The deliberation was hereby concluded.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.