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Quotation
"The party opinion is a warning signal to our party leadership, our party executive and our government. When you change a firmly established system like the great ATP pension reform, you have to change it with the support of the party members. They must be on the wagon. It is wrong to consult the members after the decision, as was the case in 1994."
Kenth Högström, Gävleborg, at the social democratic party congress in Sundsvall 1997.
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Read and listen
Urban Lundberg, Juvelen i kronan. Socialdemokraterna och den allmänna pensionen
Summary in English: Jewel in the Crown. Swedish social democracy and the politics of pension reform
Hjalmarson & Högberg 2003
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Find out more
Minpension.se - ett samarbete mellan staten och pensionsbolagen
www.minpension.se
PPM
www.ppm.nu
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Other articles in Hard Rain about
money, politics and ethics:
The subtle face of greed (no. 4), The Tsunamidebate (no. 5), The dignity of man (no. 6) and Dental service - most important election year promise (no. 14).
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| Hard Rain No 15 March 10, 2006 |
| The great social security game |
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In a brilliant piece of modern history writing Urban Lundberg describes how the social democrats were induced to leave the "welfare safe" pension system ATP. But many citizens, with a reason, take up an unsympathetic attitude towards this reform. |
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On June 8, 1998 the Swedish Parliament decided on a new pension system which came into effect on January 1, 1999. The decision was surrounded by a massive publicity drive with "information" about the thrilling new possibility for the citizen to make his own investment of some of the money intended for his pension.
Many citizens take up an unsympathetic attitude towards the reform. For instance, the most common question of all is not easy to respond to: '"what will my pension be when I stop working at the age of 65?" Some people have tried to figure this out, but it remains a guessing game. The uncertainty is more than considerable for young people born in the 1970s or 1980s with a long working life ahead.
Associate professor Göran Normann has investigated the pension system and looked closely into the outcome for employees born in 1957. The former rules for state pension and ATP do not apply for these persons. Normann finds that there is a huge difference between normal wage earners and higher salaried employees. Metal workers and nurses will only receive 50 % of their wages in pension from the age of 65. For engineers and doctors the number could be more than 70 %.
For an employee with low or normal wages, who can expect only half of his salary in pension from government and employer, the alternative is to work longer or to build a big private savings capital. In both cases an insult to people who have struggled for more than 40 years with wages barely covering food and rent
How could this happen?
In a brilliant piece of modern history writing Urban Lundberg describes how the social democrats were induced to leave the "welfare safe" pension system ATP. Lundberg's dissertation "Jewel in the crown" is a masterpiece in its genre and an important documentation for future discussions about Swedish welfare.
A pension reform was high on the agenda for the conservatives taking over government in 1991. But it wasn't natural for the social democrats to take part in the reform work. Anyway Anna Hedborg and Ingela Thalén were assigned to represent the social democrats in the parliamentary pensions working group. The economic crisis in the beginning of the 90s could have contributed to this decision.
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The ATP election 1958
"A reformed ATP-system is all right - but first an honest debate" was the heading of the pamphlet that was presented to the party members by Hedborg and Thalén in October 1992. A more misleading title was hard to find, considering what was to follow.
The "consultation" was definitely a little late. Negotiations with the non-socialist parties had gone a long way and the social democratic leadership was already preparing for an agreement with the opposition on a new pension system. Things went from bad to worse. When the 300 pages thick report from the pensions working group arrived in January 1994 party organizations were allowed only six weeks to comment on the proposals.
But the pressure increased on the leadership and the party congress in 1996 forced a new round of consultations. The opinion against the proposals was compact. New negotiations with the conservative parties led to some revisions.
Showdown came at the party congress in Sundsvall in 1997. With "blows and punches" the unruly delegates were driven into the pen. And at last the proposals from the party executive could be pushed through.
When people born in the 1960s retire from the year 2025 on, there will be large groups of employees who will not be able to support themselves on the pension they receive. There is good reason for the political parties to think about, right now, how the social unrest that will grow from this is to be subdued. And what will happen to the generations born in the 1970s and 1980s?
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