Improving Sweden’s Automatic Pension Adjustment Mechanism
January 13, 2011
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.
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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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