Pension reform in Sweden

Pension reform has been placed on the political agenda in many countries. The Swedish parliament has decided to make significant changes in the pension system. This article presents the Swedish pension reform, which goes further than the changes in other European countries. According to the Swedish pension reform, there will be a guaranteed pension that redistributes life‐cycle incomes from rich to poor and an income‐related actuarial pension without any intra‐ and intergenerational redistributive effects (with a few exceptions). The idea is to have an actuarial contribution‐defined pension within a pay‐as‐you‐go system.