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Improving Sweden’s Automatic Pension Adjustment Mechanism

January 13, 2011
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The brief’s key findings are:

  • The economic crisis has provided a ‘stress test’ for many pension systems.
  • In Sweden, the crisis triggered an automatic ‘brake’ to restore financial balance and revealed two problems with the brake’s design:
    • it can favor workers over retirees; and
    • it can result in large shocks for retirees.
  • In response, the brake could be modified to prevent unintended gains for workers and better insulate retirees from risk.
Cheerful senior man at home looking at his mail
Cheerful senior man at home looking at his mail
Author(s)
Headshot of Nicholas Barr
Nicholas Barr
Headshot of Peter A. Diamond
Peter A. Diamond
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Citation

Barr, and Peter A. Diamond. 2011. "Improving Sweden's Automatic Pension Adjustment Mechanism" Issue in Brief 11-2. Chestnut Hill, MA: Center for Retirement Research at Boston College.

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Topics
Social Security
Publication
Issue Brief
Publication Number
IB#11-2
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