Pay agreements and a new pension scheme in local government

In April and May 1998, collective agreements were signed on pay and general working conditions for those employed in Swedish municipalities, county councils and parishes. The settlements, which run for three years, mean a rise in pay of around 9% by the end of 2000. At the same time, new agreements on supplementary pensions were concluded.

On 17 April 1998, the blue-collar Municipal Workers' Union (Svenska Kommunalarbetareförbundet, Kommunal) signed collective agreements with the Association of Local Authorities (Kommunförbundet), the Federation of County Councils (Landstingsförbundet) and the Association of the Parishes within the Church of Sweden (Svenska Kyrkans Församlings- och Pastoratsförbund), regulating pay and working conditions for around 420,000 employees in county councils, municipalities and parishes. Average monthly pay will rise from SEK 13,606 in 1998 to SEK 14,898 in 2000, or by 9.5% expressed as a percentage.

Every employee covered by these agreements is awarded an increase of SEK 300 per month in l998 and SEK 200 in 1999. The minimum wage for employees older than 19 will however rise by a total of SEK 700 a month during the same period. In addition. the minimum holiday bonus will be increased in two steps, first to SEK 750 per day and secondly to SEK 790. This favours those who have the lowest rate of pay. Ylva Thörn, president of Kommunal, describes the agreement sas having an "obvious low-wage earner's profile".

Almost a month later, on 13 May, the white-collar Swedish Union of Local Government Officers (Kommunaltjänstemannaförbundet, SKTF) and the Association of Management and Professional Staff (Ledarna) signed their agreements with the same employers' associations, covering in total 110,000 employees. These agreements for the white-collar workers are estimated to provide for an increase of 8.7% during the three-year period, allowing for wage drift. All employees covered will receive an increase of at least SEK 200 a month in 1998, SEK 150 the following year and SEK 150 in 2000. Employees who earn less than SEK 15,000 a month are guaranteed higher increases.

Parallel with the bargaining on wages, the trade unions and employers' associations have negotiated a new scheme for supplementary occupational pensions. This was done on the employers' initiative. According to the old scheme, the employee was guaranteed a pension amounting to a certain percentage of his or her final wage. In the new system, the benefits will depend on the value of contributions - 3.4% of the employee's pay - paid by the employer.