Government wants to increase collectively agreed retirement age to 67

Under a proposal issued by the Swedish Ministry for Industry, Employment and Communications in October 1999, the retirement age set out in collective agreements will be increased to 67 years from the current norm of 65.

In a memorandum issued at the beginning of October 1999, the Ministry for Industry, Employment and Communications (näringsdepartementet) proposes adding a new rule on retirement age to the Employment Protection Act (lagen om anställningsskydd). The average retirement age in most collective agreements is currently 65 years. The new rule will, if passed by parliament, state that any existing agreement that obliges an employee to retire between 65 and 67 years with a retirement pension will not be valid in future. The retirement age would be set at exactly 67 years in all these agreements from 1 January 2001. The proposed rule would apply to both collective agreements and individual agreements. The proposed change is a somewhat sensitive issue as, for example, the Swedish Employers' Confederation (Svenska Arbetsgivareföreningen, SAF) and spokespersons for legal authorities claim that it may not be legal, according to certain International Labour Organisation Conventions, to interfere in collective agreements in the manner proposed.

The right and obligation of Swedish employees to retire with a pension are normally regulated in collective agreements on pensions. Most employees are currently obliged, because of rules in such collective agreements, to retire before the age of 67, and in most cases at 65. The state retirement pension scheme currently allows for payments from the age of 65. There are also some categories of workers who are obliged to resign before the age of 65, such as military staff, air-traffic controllers, firefighters and some employees in the arts, like dancers and opera singers.

The Ministry's proposal (Ds 1999:39) should be seen as a consequence of the political settlements made before current reforms of the pension system started (SE9811120F). The idea of the new system is that a person's income during their whole working life will be the base for their retirement pension. Under the new system, there will be no upper limit for the period of employment required for a full pension. An employee may choose, after reaching the age of 61, when to retire. The later the employee retires, the higher his or her pension will be. The new pension scheme will start paying out retirement pensions in 2001.